Serge Berger is the head trader and investment strategist for The Steady Trader
. Sign up for his free weekly newsletter . The carnage continued in the markets
worldwide yesterday. The euro zone bond credit spreads increased to their widest
levels in history, and stocks followed in kind. The S&P 500 fell 2.56%, closing
not only below 1,270, but also below the June lows of 1,258. I highlighted the
1,270 level yesterday as a key area to watch for signs of further weakness, and
the index sliced through it like a hot knife through butter. The
head-and-shoulders pattern that I also pointed out yesterday works to an
ultimate target near 1,180. I'm not saying we will reach those levels, but
rather stating what this pattern's ultimate textbook target would be for those
that are interested. The flight to safety was apparent in gold, as well as
bonds, which rallied across the yield curve. Yields on 30-year U.S. Treasury
bonds dropped below 4% for the first time in about nine months. Further signs of
the sprint to higher ground could be seen in the rally of the Swiss franc versus
both the euro and the U.S. dollar. The Swiss franc has been on an insane rally
in recent months (and years). And yesterday, it finally seemed to really hit the
Swiss stock market (that strong currency ain't kind on Swiss exports), which
sank 4% for the day.
No comments:
Post a Comment