Spain, Walmart Sink Global Markets

Things just started off bad for Europe with a 1-2 combo of the Dutch political turmoil with the P.M. resigning his post over the budget cuts and austerity fiasco adding to the already unstable eurozone since they (the Dutch) were such strong backers of the EU fiscal treaty – ironically lecturing Greece on getting its house in order.

This was just the right hook while the left cross came in from south of the border where Wal-Mart is making a run for it as the company is being hounded by allegations of extensive bribery at its Mexican subsidiary, cryptically named Wal-Mex. Add in a little spice in France with the political uncertainty there, and you got yourself a storm for the global markets giving every reason for indices to tank. Oh, I forgot to mention the eurozone’s private sector business activity contracted the most in the last five months which is just more salt in the wound.

While Walmart shares plunged 4.66% after the report, the Dow lost 102.09 pts or .78% and the S&P 500 shed 11.59 pts or .84%.

Back in Europe, Spanish yields are back above 6% which would be close to red-lining your Toyota Corolla at 7000 RPM’s (not something that can be maintained for long).

If the land of Orange loses its AAA credit rating, this will only add downside pressure to the region which we feel is now resembling the Titanic…after it has hit the iceberg, but the band is still playing as if nothing happened.

Silver – False Break?

After the defenses at $31 have held for the last month, today the shiny metal finally broke the lower boundaries selling off aggressively losing over a $1 in 20 hours of straight selling from the market open. Although the last few candles were impulsive, especially on the break of the $31.00, price rejected on the last bear candle, then followed it up with a pin bar rejection off the $30.50.

It could be the first sign in a false break, but we’d like to see a 4-hour close above $31 to confirm the false break before considering a long here. Short-term traders can consider a price action pull back into the $30.50 level with very tight stops below, but should this fail, the $30.27 support will be next on the docket before bulls consider getting back in.

It should be noted the price action has been held by the dynamic resistance in the daily 20ema for some time so upside gains could easily be checked around $30.50. Bears should look to sell either here or right at the $31 figure for a breakout retest play looking for lower ground.