Day Summary

As I mentioned in my Mondays post we did bounce from supports yesterday morning quiet substantially but then rally fizzled late afternoon so we followed thru to the downside. Now we are reaching another crucial support on S&P at 1330, if we hold this support we may get another 20-25 points rally in S&P, if we break to 1310 then I think there is a very good chance that we may retest match lows around 1260 and beyond. I feel bulls have to take one last stand to save the rally very soon otherwise we may retest lows and who know may enter another down leg and a confirmed bear market. The signs though are not good for equities, not just oil but grains have started to move up again, Ags were lying low for last 2-3 months but today we had 7% rally in wheat 6% in sugar 7% in beans that's a huge rally for Ags. So not just oil now, ags willl start putting more inflationary pressure and Fed will be between rock and hard place and may have very little room to manoeuvre. Emerging markets look even worse, India has already broken its march lows and China is heading there, Europe is also not looking good but its more closely link to US markets.