By Gareth Soloway on June 29th, 2010 3:53pm Eastern Time
The markets gapped lower today. Note on the chart below, how the last candle yesterday closed below the blue key trend line signaling this possible massive move lower. The SPDR S&P 500 ETF (NYSE:SPY) are down 3.33% on the day, a massacre to say the least. Worries that China is dramatically slowing caused the Shanghai Index to drop over 4% last night. Europe also started to panic of issues in Spain with the banking system and Greek protests and strikes.
While a majority of this selling is off of the fear that is grasping the markets, some may be due to end of quarter window dressing, as fund managers reposition themselves. The fact that gold, the SPDR Gold Trust (ETF) (NYSE:GLD) is only fractionally higher tells us that. If the markets were dumping in a major way on excess fear, gold is a flight to safety play and should be up higher. The higher dollar is playing a small role in keeping gold in check as well.
Regardless of the move in gold or the markets, things are ugly and key support on the SPY has been broken at $107.50 on the gap down. In addition, the secondary massive support at $104.50 will possibly be broken as well. Should $104.50 be taken out and confirmed tomorrow, $99.50 is a key level to watch on the SPY.
Oil is getting lit up today as the a massive slow down in China would decrease demand great.
Some major stocks are taking a huge hit. Apple Inc. (NASDAQ:AAPL) is trading at $255.61, down $12.69 (-4.73%). This is a huge hit for the strongest stock out there and must be taken seriously in this market. Commodity stocks are taking a huge hit today as well with stocks like Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) continuing to extend losses from the previous week. To get more in depth analysis, swing trades, guidance and education, join the Research Center.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
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