Despite a lower opening, the markets staged a mid-day comeback yesterday, but were unable to hold on to the advances as the chart above shows. Afternoon selling produced new lows for the day with the only positive being that we rallied off those lows towards the close.
As I mentioned yesterday, our emerging markets holdings did indeed break through their trailing stop loss points and, barring a huge turnaround today, will be liquidated. No other stops have been triggered.
While all eyes were still feasted on the Greek crisis, along with the potential of more fallout, the U.S. displayed more signs of an economic recovery. Positive figures from ADP showed, two days prior to the Labor Department’s payroll report, that the private sector added 32,000 jobs in April.
Additionally, the number of planned job cuts by U.S. employers fell 43% from the previous month, which is at least a step in the right direction.
Despite weeks of yapping to the contrary, warnings from the IMF and ECB of financial contagion in the euro zone from the Greek debt crisis were heard loud and clear and added to market uncertainty. Any default would add risks to the stability of the monetary union and could jeopardize the future of the euro.
Be that as it may, we have no control over those events, so we will focus on the things that we can control, which is the execution of our sell stops. This topic has been discussed at length via dozens of blog posts over the past year.
In case you missed it, I have compiled these in a 70-page e-book, which you can download for free right here.