Looks like the equity markets in the US are continuing the global sell off. I doubt any legislation will patch up the hole left by the implosion unregulated OTC derivatives. On the S&P 500 December futures contract (ES), my system shows 1176 as Support 1 and 1162 as Support 2 for today. The pivot is coming in at 1198 and R1 is just about 1213. This gives us a very large trading range for today, but really only room to sell off to as low as about 1150 (near the September lows).
Risk aversion from overseas is increasing as we see the carry trade unwinding dramatically from a high of near $107 overnight to $104.80 now. The flight to safety of gold and bonds continues as equity investors are being punished for holding the lowest quality paper of the corporate capital structure during this crisis. Gold is testing the key $900 resistance level.
With the global economy poised for a recession, it is no surprise that energy prices are dramatically lower on the day. Oil and natural gas are off over 5% as traders speculate energy usage will contract and inventories may grow.
