Nervous Times In The Market

Despite the Nikkei rally on Wednesday, the domestic markets did not participate at all as the chart above shows (courtesy of marketwatch.com).

Broadly diversified international ETFs, like VEU, fell further (-2.68%) then the domestic market as represented by SPY (-1.86%).

It was nervous time as the news from Japan in regards to their nuclear power plants continued to be spotty in terms of accuracy. Not helping the markets at all were suggestions from Energy secretary Chu that the situation may be worsening.

That came after an earlier report by the energy chief of the EU saying the crisis was out of control. Other items on the news menu covered foreign bankers fleeing Tokyo, and the U.S forces being ordered to stay at least 50 miles away from the crippled power plants.

Domestically, housing starts dropped precipitously to their second-lowest level on record, while building permits fell as well. Producer prices showed their biggest increase since 1975 not helping the markets to establish or find a bottom.

Our Trend Tracking Indexes (TTIs) slumped along with the markets and are closing in on their long-term trend lines. As of today, their position remained in bullish territory, but weakness has clearly set in:

Domestic TTI: +3.11%

International TTI: +1.07%

The international area has suffered a lot more than the domestic one and it appears that the next few days will be crucial as to whether a rebound is in the making or if we will get a Sell signal for that sector. Stay tuned; I will send out a bulletin to all subscribers and post to this blog should a sell signal materialize.