Well the US threat level is orange but red at airports.
You are not allowed to carry a drink or a phone or pretty much anything onto a plane as they have arrested 21 people in England in a plot to blow up 10 planes flying to the US with liquid explosives.
Needless to say there will be a bit of a sell-off today.
Hopefully you took my advice to get out of the markets yesterday seriously and you will be saved a lot of heartache. I should have listened to myself more and kept nothing but I was silly and held onto a few positions.
I won’t be around but let’s watch to see if our 200 dmas hold for signs that it is safe to get back in, then buy some of our recent picks on a good entry.
These are the levels we were watching out for:
- The Dow’s 200 dma is 11,100 and it is also psychological so watch out below!
- The S&P fell below the 200 yesterday and it would be a very good sign if it held the 50 dma at 1,260.
- The Nasdaq is very unlikely to hold 2,050 but a good sign if it does.
- The NYSE has been the strongest index and is far above its 50 dma at 8,071 – below that, the 200 dma is at 8,029 and this is the main point I am looking to hold if there is any hope.
Asia was down slightly but I think this plot came after they closed and Europe is down about 1% across the board but is back from a 2% drop on the initial news.
Oil is dropping as a slowdown in travel is a big demand destroyer (remember I said that the BP shutdown could be made up for by canceling 123 flights a day?).
Gold is very oddly not going up, which gives me a little hope for the markets.
There will be a big overreaction of course so cash in puts like our LUV play early and take advantage of the chance to buy out any callers you sold. Apparently United, American and Continental were the target airlines.
Interestingly, this will add fuel to “the Fed is done” camp and may actually boost the markets but be super careful out there – anything can happen.
Of course Bush will have to have his say about this and he rarely instills confidence in the markets so be wary of that too!
