It Could Be A Tough Day In The Stock Market Today

It's days like this that will test the nerves of the amateur traders who are either perma-bulls or buy-and-hold oriented. Of course, that's easy to say when your money is on the line, knowing that most professionals in this business are trading Other People's Money.

The first thing you ought to do when checking out the pre-market action is look at the winners and losers in the top 170 stocks in Europe. Sometimes it shows a rotation into or out of sectors like the financials, industrials, consumers, etc. Sometimes, like today, it shows an overwhelming money flow out of equities.

The 170 I refer to of course are the CAC-40 of France, the DAX-30 of Germany and the FTSE-100 of the UK. These are most of Europe's largest capitalized stocks. You can easily find them by going to Yahoo Finance, Market Stats > Indices > World > Europe > CAC-40 (and DAX or FTSE-100) > Components.

This morning, as I write, the scoreboard is flashing RED: 40/40 CAC down (index down -2.67%); 30/30 DAX down (index down -1.38%); and 98/102 FTSE down (index down -1.82%). Bad news for the Bulls. HB&B getting smashed.

I have been writing lately that there is a serious inter-bank lending problem. The system is grinding to a halt. In my opinion, many of the high prices in the equities you have been trading have been set high, and pumped, as the dump proceeds. I have for some time been writing about DISTRIBUTION. Now - at least on days like today - you are seeing it.

I wrote about it last evening when I stated that the Market Vectors Junior Gold Miners ETF (GDXJ 29.57 0.00 0.00%) was given some nice lip gloss and make-up in the last couple trades. Whoever does this knows the public reads only the final price. I watched one of the inverse ETFs I trade bumped down by about -1% on 100 or 200 shares, well after the close btw, to help make the day look stronger to the Bulls. Whoever does that sort of thing has no respect for honesty or the public, and they ought to be turfed from the business, which would happen if I were running the SEC.

In any case, the old adage "Red sky at night, sailor's delight. Red sky in the morning, sailor's take warning".

In the Bible, (Matthew XVI: 2-3,) Jesus said, "When in evening, ye say, it will be fair weather: For the sky is red. And in the morning, it will be foul weather today; for the sky is red and lowering."

Yes, it could be a tough day.

The US Dollar (June future) is now up almost to 86; July Crude Oil is down -1.77 to 77.22; and the June S&P 500 is down -8.6 to 1148.2. So far, the precious metals are strong as they are safe havens, albeit temporary.

"Blessed are those who mourn, for they will be comforted."

Have a great day.