To sum up the weeks events, the market as Itz pointed out over the last several weeks, was looking for an excuse to sell from it's overbought levels. The spreading contagion from the Eurozone was just that excuse. The Eurozone contagion is similar to the Lehman problem. Once banks and brokerages started smelling blood in the market they refused to loan to anyone until they were sure it was safe. That meant Lehman and others could not get funding they needed to stay alive. Almost a year past before banks started lending to one another. Paul Volcker raised doubts over the euro's long-term prospects saying, "You have the great problem of potential disintegration of the euro." Also, "The essential element of discipline in economic policy and in fiscal policy that was hoped for" has not occurred. A break down of the Eurozones debt and problems LINK
Gold was on the lips of everyone this past week, but if you noticed the dollar rallied too. What does this mean? Its a sign of INSTABILITY!
What's ahead for trading this coming week? I suspect that Monday and Tuesday could see a continuance of last weeks selling, use this as a buying opportunity. Economic data points this week, PPI, Philly Survey and FOMC minutes.
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