Europe: The Song Remains The Same

The markets were slightly higher after the open, but now they have sunk back into negative territory, with the Dow down roughly 100 right now.

The culprits are the same ones as yesterday. Namely, the euro is falling, boosting the dollar, and credit spreads on sovereign debt (in Europe) are widening. The ECB met and decided to leave rates unchanged at 1.00%. Some may have expected a rate cut, but that didn't seem likely.

The strong dollar is weighing on commodities again, pushing the CRB Commodity Index down -0.6%. Oil is down near $79, but gold, the new alternative to holding currencies, it up again close to $1188.

The monthly retail sales reports this morning were mixed, with some solid reports, but more negative reactions in the stocks.

Asian markets were lower overnight, some sharply. China fell -4.1%, and Japan declined -3.3%.

The 10-year yield is lower again to 3.47%; and the VIX is +5.9% higher to 26.38, but has not taken out yesterday's highs.

The put/call ratios are elevated again, with the CBOE put/call at 0.94, and the ISEE is very low at 64.

Trading comment: This is quite a 3-day slide, with the S&P 500 down -5.7% already. I guess I was a little early in calling for this correction, but timing trading tops is always difficult. I'm just glad I raised cash when I did, as we should be in better shape as a result to take advantage of what I think will be another good buying opportunity. I plan to make my first round of buys today.