Since the start of trading last Friday, the DOW has lost 4% of its value and we're now only ~ 150 points away from the key downside resistance levels I warned you about last week: DOW -- Trouble Ahead?
The issue now is: we may see some additional losses later this week, as a potentially toxic mix of retail sales, jobless claims and inflation data is due for release tomorrow and Friday -- could this trigger a new selloff? Will we actually fall below key downside support? Will the Plunge Protection Team be ready and save the day once again?
Economic Reports due tomorrow:
- Import/export prices @ 08:30 EST (Consensus: 2% change)
- Jobless Claims @ 08:30 EST (Consensus: 365K)
- Retail Sales @ 08:30 EST (Consensus: .5% & .7% excluding autos)
- Business inventories @ 10:00 EST (Consensus: .3% increase in inventories)
Economic Reports due Friday:
- CPI @ 08:30 EST (Consensus: 0.5% & .2% excluding food and energy)
- Consumer Sentiment @ 10:00 EST (Consensus: reading of 59.8)
NOTE: Friday's CPI and Consumer Sentiment are biggies! Take a look at the Sentiment chart below -- last month's University of Michigan report showed U.S. consumer confidence fell to a 28-year low in May. Another grim reading on Friday could wreak havoc on the markets.
In Closing: Regardless of what the shills are saying, all is not well with our world economy and I doubt the DOW will hold up the the increasing downside pressures... Taking a quick peek as I pen this brief post -- even the Asian Markets are tanking tonight: Major World Indices .
- Shanghai is down > 3% and below 3,000
- Hang Seng is down 2.5%
- Nikkei 225 is down 2.5%
- Taiwan Weighted down 2.5%
- Straits Times down 2%
Bottom Line: We may very well see an interesting close to this week -- w/DOW possibly closing below key support levels. If it DOES break through this first resistance level, get ready for a serious fight in the days/weeks ahead, as the PPT will defend 11,700 - 11,650 with everything in their arsenal... And if that level doesn't hold, look out below!
Best regards and good night