The SPY and QQQQ closed down on the session 3.09% and 2.89% respectively. The gap down trig- gered the daily sell, and with no attempt by the bulls to buy the gap, it was all red the entire day. Last weeks low was pierced and the markets continued lower. Now that a lower high has been put in, the trend will likely be down for the immediate term as bulls who wait for obvious and confirmed trend reversals (re: herd) start to unwind positions. Do keep in mind that the SPY is down 7% from the highs, and bounces will come, how- ever the 104.00 area looks like a reality for now. How fast we g et there depends on the urgency offearful bulls, but also the shorts who are underwater from levels far below. Those shorts are looking to minimize their losses. Bounce fails, heavy selling resumesEcon Calendar 08:30 Jan Nonfarm Payrolls (last -85K) 08:30 Jan Unemployment Rate (last 10.0%) 08:30 Jan Manufacturing Payrolls (last -27K) 08:30 Jan Average Hourly Earnings (last m/m 0.2%, y/y 2.2%) 15:00 Dec ConsumerCredit (last -$17.5B)Daily Trading LetterFriday, February 5, 2010Earnings CalendarBefore the Open: AET, AYE, AXL , AIV, BZH, BPO, BRKS, SUR, LRN, KELYA, MAG, MD, NNN, PPL, PBH, SXT, SPG, SEP, TE, TSN, VVI, WY, YRCW LARRY’S CORNERStrong trading volume, volatility spiking, dollar strength, and fear globally over sovereign debt, equals one rough trading day! ! Is it the dollar flexing its might or…………..worries over the euro et al ? Forget gold, emerging markets, commodities, in the face or fear U.S. Treasuries appear to be the pile with the least amount of f lies. Poor debt auc- tions in Portugal and Spain have spurred concerns over unhealthy debt levels. The thought here is, all these events are likely to stop the U.S. labor market from rebounding in the near-term, and lets not forget China's attempt to curb its over- heated growth. Sector performance (% change previous day): Consumer Staples (- 2.33%) Telecom (-2.37%) Utilities (-2.64%) Health Care (-2.64%) Consumer Discretionary (-2.86%) Tech (-2.88%) Industrials (-3.06%) Materials (-3.84%) Energy (-3.90%) Financials (-4.15%)
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