Asian markets were also down sharply overnight, with Hong Kong -4.2% lower but China was closed.
It has already been a volatile morning, with our markets opening lower but then rallying all the way back into positive territory. Currently, the markets are fading a bit and giving back some of that rally.
The flight to safety is mixed today, with Treasury prices flat and the 10-year yield steady at 1.92%. Gold prices are also lower to $1834, while oil prices are actually up a bit around $87.50.
The volatility index (VIX) is on the move again, rising +7% to 41.30 currently. That said, it continues to make a series of lower lows on the last 4 spikes higher on the chart.
In corporate news, Broadcom (BRCM) announced it will acquire NetLogic (NETL) for a 50% premium. Anyone who is long NETL this morning is feeling pretty good.
Trading comment: Until the news in Europe improves, all rallies seem temporary in nature. We continue to remain defensive and have been adding to our hedges on any large rallies. The earnings estimates for the S&P 500 for 2012 are starting to be revised downward, and that will be an important development. The ECRI weekly growth index fell deeper into negative territory last week.
long SH; short EFA
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