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SPX trading just above major support at 1150

|Includes: SPDR S&P 500 Trust ETF (SPY)

The S&P 500 has reached a major support level as fears of contagion persist throughout the financial system. With crude oil below 80.00 and gold pressing up against 1200 all while the US 10 Year Note is below 3.50% and the DXY is above 84 it is obvious that fear has taken hold in the Euro zone. The ambition to avoid losses rather than seek yield has pumped up the rush to secure hard assets in the form of gold and real estate, or at a minimum the "riskless" US bond market.

The rush to the DXY has longer term implications for the US economy as our exports start to suffer from pricing pressure in Europe and the emerging markets. Pressure is likely to continue to remain on US equities as a quick fix is not in the immediate future. Dip buying is not the strategy to expect in the near term. Look for some consolidation around 1150 below which opens up minor support at 1144 followed by 1138.

Disclosure: no positions