Markets gapped lower at open today after some very strong sell off overnight in Asia followed by Europe. Volume was heavier and some major supports were taken out today including 21 dema on Q's and SPY. Internals were very weak and A/d line hit lowest reading since April. Sector wise material/steel were the weakest and health care though red was out performer today.
I had been suggesting for some days now that markets look heavy and tight stops on long positions was advisable. On Friday we saw substantially weaker internals than what price action would have suggested.
This week is options expiry and lot of volatility could be expected but very soon it will be evident if this is buy the dip or sell the rip market. I still think dollar is the clue to this market and if dollar keeps on strengthening markets as well as commodities would remain in trouble.
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