-Yesterday, we had Standard and Poor’s threaten to downgrade 15 nations in the EU. We now (as of 8:30am EST) sit about flat from yesterday’s close. German Factory Orders have propped the markets up temporarily before the open. We saw a 200 point drop after the credit threat and the RBA cutting rates to 4.25% from 4.50% helped drive the markets downward as well.
-Once Standard and Poor’s threatened to downgrade the US, it took them about four months to finally slash the US credit rating. The market was most likely going to decline due to the FED’s expiration of “QE2”. However the downgrade is what fueled the selloff and pushed the markets into a roller coaster of volatility.
-SPX 500 sits just below the 200 day MVA as it has tested it several times. It could easily break this area, but I would remain cautious as we have the EU Economic Summit on Friday.
