If you survived Wednesday and yesterday, Well Done! There were raging bulls on Wednesday and the market and the S&P was racing towards 1360. Yesterday the bears were trading as low as 1318. The difference in the two markets was not that huge. The reality was the bull market was a bear squeeze and yesterday was a dose of reality.
There are a number of reasons this market is going to be extremely dangerous over the next few weeks.
US data shows a collapse in American economic activity.
European leaders cannot agree on any measures towards the Eurozone.
This vacuum will lead to high volatility and uncertainty.
Look back on your charts to August last year for a preview of what might be in store.
The bear view:- S&P target 1300 than 1260, Euro 1.2440, 1.2325 1.1900
The bull view:- Massive market intervention to save the Euro, ECB money printing, Market through the roof.
This is either the end game for the Euro or a massive play to save it. You need to be very carefull and gear up for big days, S&P 400 points for example.
A note on Gold. We got stopped out yesterday because the market decided to thrash all asset classes. We still believe that gold will rally but it is now too volatile to trade.
Our message is be very carefull, accounts can be lost in conditions like these, small stakes big points.