Tuesday, March 15, 2011

U.S. Markets gap down 2.5% at open but steadily ramps up to limit losses

With the world literally watching minute by minute on the potential nuclear meltdown story in Japan, U.S. markets recovered their opening gap losses to finish down 1.2%.

All the major U.S. averages closed below their 50-day moving averages and I sold almost every long position (97%) in friends' retirement accounts and converted into cash (U.S. Dollars). The aggressive accounts have a starter 20% net short position.

NYSE Breadth was 23 to 7 negative. Only 78 issues closed at 50-day highs.

Ironically, the worst sector was precious metals. SLV down 4% to 33.61, GLD down 1.8% to 136.27. In a market with no buyers, there is no safe place to hide except cash.

The best triple short ETF was the Direxion Developing Markets (DPK) up 2.44 to 42.07. Yesterday's EMV initially had a 15% gain at the open but closed only with a 12 cent gain to 39.27. How's that for volatility.

Railroads was the second best sector via RA up .64 to 17.05.

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