What I Am Watching Monday

$SPX (S&P 500 Index)

Over the past week we have seen the largest downturn in the $SPX. The $SPX has fallen continuously on news from the Euro Zone. Protests have erupted in Spain and Greece over more austerity. On the front cover of the Wall Street Journal, there was an old lady trying to dodge bottles thrown by protesters. Europeans in these countries have there life in soul in the government and refuse to give any of the constant money flow up. So far I have noticed a correlation between any large protest in the Euro Zone and the markets. Markets go down when there is unrest this is because of a lack of stability. So on the technical side, markets have fallen of a fairly large rally. This is the largest movement down we have seen in the markets in three months. If you view the chart below you can see the same kind of correction not long ago. The markets rocketed on this correction and rallied further. Based of what I see we are at a very important level on the $SPX. As you can see before the same pattern formed on that last correction. There was a strong bar up, then a muted bar down, after we rallied very high. Based off what I see if we break the channel on the $SPX we are going to move down. The more likely scenario is that we finish the pattern and begin a move up.

Euro Futures (/6E)

Due to the unrest in Europe, I have been short the euro for the past week andeur have finally sold the position.  I have decided to take my profits because I have seen a slow down in the move down. Although this observations seems to be taking place, I am prepared to short the Euro anytime I feel necessary to make a trade.

Next Week Overview
I want to not have any net in my portfolio.