In a word it was ugly. For some perspective, I have 275 equities on my watch list 247 of them were negative 6 six positive and the rest were flat.


Basic materials (UYM), big caps (BGU) and solars (tan) had the worst of it; while the dollar index and fixed income outperformed. For additional perspective every etf I watch that tracks an equity sector or index was down on the day.

Not that it really matters technically but the DJIA closed right on 10,000 and that is good for a lot of chatter and headlines.

The “Lehman Gap” on the SPY occurred during the week of 10/3/08, the dollar index closed that week at 80.61. The high in the index today was 80.28 and it seems we are bound for at least that level if this risk aversion trade continues. Dollar strength has equaled equity weakness recently.

Like everyone else I have been waiting for the famous “10% correction” and it appears that we are in the midst of it. My belief is that we are headed for at least the November lows in the major index’s which would roughly coincide with the 150 day MA’s and then October lows which would bring us down around the 200 day MA’s. We are not going to go there in a straight line but that appears to be the glide path now.

Employment Situation numbers are out at 8:30 tomorrow morning and should set the tone for early trading. If we gap down hard after the number my plan is to let the dust settle a bit see if we hold and then try and pick up some shares on the important MA’s. If we gap up then I am going to be looking to get short if the market starts to roll.

Watch last Friday slows in the indexes and whatever you may be trading, it is important that they hold.

Following is some of the levels I will be watching. They either represent last week’s low and major support or important moving averages.

aapl 190.25

bac 14.68

c 3.13

cat 51

ge 16

gs 147.81

jpm 38.07

x 43.75

qqqq 42.08

smh 24.3

spy 105.62

uym 25.19

xle 53.26