Yesterday, we talked about how markets sometimes go from reality to fantasy and clearly today's news from China was more a reality check for the markets. Logically, you cannot have a recession in Europe and the US economy barely limping along and have Chinese exports jumped off the charts.
Europe and the United States are the principal customers for China to sell its goods. And if Europe and the US are not buying because of economic conditions, how can China keep growing its economy at a record pace?
Today could mark the start of a reality check for the markets. How the markets closes today will give us more clues as to whether or not the market is putting in a top or biding its time to move higher.
How the major markets closed last Friday: S&P500 1,390.99, DOW 13,906.17, NASDAQ 2967.15. Should we close below these levels today we believe that the the market could once again reflect reality and head lower.
We will also examining in detail how our Trade Triangles handled the moves in Research in Motion (RIMM) and J.C. Penny (JCP). Both of these stocks are on the move for today different reasons.
Now, let's take a look at the charts, and check out what is happening in the markets.
