Quick Market Touch

by Dan August 3, 2011 9:27 am • Commentary

Yesterday was obviously a bloodbath for risk assets, and even-though the S&P futures are up 50bps as I write at 9.20am, Asia closed down across the board and Europe’s weakness is being led by the DAX down 1%.  The DAX is down over 10% from the last high made in early July and quickly approaching the March low, while the SPX is only down about 7.5% in the same period.

The SPX is very likely to sell off today and test the 1250 level, and at some point from a fairly oversold condition we are likely to bounce a bit….The damage done yesterday in the consumer/retail sector (AMZN  4.35%,LULU  -4.6%, RL & COH  -6.5%, and TIF  -8.24%) was kind of jarring and tells me there is more pain to come in high-fliers.

Not Looking to add to longs here, want to remain cautious and defensive.  I will start picking at names I want to own as we break below 1250, but will also look for short opportunities in names that haven’t broken yet like CMG.

I want to watch APPL, CMG, NFLX to see if they start to crack and also eying the bank stocks, which had appeared to put in a bottom, if they give up the bottom then watch out below.