Monday’s feel-good-rally after Friday’s drubbing died at the opening yesterday as prices gapped down and never recovered.
Despite a rise in pending homes sales and positive Merck and Pfizer earnings, all eyes were feasted on the Greek bailout and the increased concern that the Greek government would fail in getting its debt problem under control and force another bailout package.
Coupling that with the fact that Portugal, Spain and Ireland are waiting in the wings with similar problems, simply created an unknown that the markets were unable to handle. You can read more on that topic here.
The euro was the whipping boy of the day, while the dollar rallied and supported our positions in UUP. There was no place to hide, so UUP turned out to be the only bright spot on the computer screen.
In terms of our trailing sell stops, none were triggered, but the emerging markets moved within shouting distance and will be monitored closely. As I posted in “Running Out Of Steam,” the emerging markets were the leaders on the way up as this buy cycle began, and it appears that they will be leading on the way down as well.