Asian markets were lower across the board overnight, but Europe has been higher this morning, with Germany rallying as much as 2.7%. There has been talk that eurozone officials may be preparing new steps aimed at shoring up the fiscal and financial conditions across the pond, but no definitive news yet.
After last weeks sharp selloff, the markets are pretty oversold and it wouldn't take much to see a bounce this week, especially with quarter-end at the end of the week.
Precious metals remain under pressure, with gold prices dropping below the $1600 mark, and silver prices continuing last week's swoon so far.
The 10-year yield is higher to 1.86%; and the VIX is higher also, up another +3.5% to 42.70.
Financials are actually bucking the weakness so far and leading the early action. Technology shares are lagging, led by Apple (AAPL) where there is chatter of production cuts in iPad2s. Somehow I'm not buying that, as I think they are going to sell every single one they can produce.
Trading comment: The SPX held the 1120 level again last week, and is trying to build on its bounce since then. With the VIX this high, traders are still expecting large swings this week. My gut tells me after last week's sharp selloff, the surprise move this week should be to the upside. But it sure would be nice to have a catalyst for it. I took some small trading profits on our index etf hedges last week, but would likely look to add them back if we get the bounce I am looking for. Engine room...more steam!
long AAPL, GLD, SH, SLV
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