The high volume sell off today suggests to me that the market is headed lower for a while. I bailed out of my trading postions in EWZ, FXI, OIH, and QQQQ. I sold FXA, FXC, and FXE higher last week. I'm 100% US Dollars, and, except for trying to flip an oversold bounce, will be doing a lot of nothing in the markets this summer.
As I see it, the financial markets baked in economic armageddon by March, then baked in economic recovery by June. The truth seems to lie somewhere in between.
With the equity sell off will come the highly correlated dollar strength/commodity sell off/foreign stock sell off. We could be heading for a double bottom this summer or fall. I'd be a buyer of that double bottom, but that would seem to be months away.
The trade now, as I see it, would be to short a blip up. I'll use the sell off in precious metals to buy some more coins/bullion as I slowly allocate dollars into hard assets. I wonder if I could lease an oil tanker like some of the hedgies, lol.
Actually, except for market manipulation, I don't think the price of oil belongs with a 7, 6 or 5 handle. Based on current economic realities oil should be in the 30s or 40s, in my opinion.
In short, the oversold bounce appears to have run its course and economic and political reality is back driving the car.