Hanging by the thread: Politicians needs to act now: IDCC, BPAX, GLD, IAU, FXE, TLB

As predicted Eur/Usd has dropped to 1.29 level, and Dow has fallen almost 450 points till now. The technical level to watch in Dow is 11808, 11716, on the downside while 11913, 12044 on the upside. In S&P500, watch 1209 and 1200 on downside and 1222 and 1229 on the upside. Its needs to hold the level breaking either upside or downside and then it can test the next level. 

Today, there was Global sell off in an anticipation that S&P or Moody might downgrade France. Italian 5 year bond auction made the situation worse, since it had to pay the highest interest rate in the history of Eurozone. Italy and Spain combine have to pay 550 B euro in 2012 which is more then EFSF fund which has 440 B euro.

This doesn't even include Greece, Portugal or Ireland debt. EU countries have pledge to grant 200 B to IMF, and ESM will have the firepower of 500 B which will kick in from July 2012. But the big question remains, who's lending and how will they manage such a big amount. Credit rating downgrade will also increase the borrowing cost and it would be even more difficult to manage this money.

Europe is running out of time, if they don't come up with some concrete plan soon, it could be disaster for the Europe and the World economy.

Today, Dow broke the level of 11808 and S&P500 broke the level of 1209  many times but it was not able to hold below this level. So US survived the panic sell off but its not out of the wood yet. VIX didn't showed enough movement, its at 26.04 VIX above 30 is danger zone. Eur/Usd has very big resistance at 1.28960, if it breaks and hold below this level, then the stock market is heading for south big time. I think market will have small re bounce because the option expiration is on Friday, and many will reposition their portfolio.

US economic data to look out are

Jobless claim (8.30 EST) 390k or lower is bullish, while 400k is very bearish.

Producer Price Index (PPI) (8.30 EST): 0.2% or lower is bullish sign while 0.2% or higher will be bearish sign.

Empire state mfg. survey ( 8.30 EST): 3 or higher is bullish sign, while 0 or lower will be very bearish sign.

Industrial production (9.15 EST): 0.2 % or lower is bearish sign while higher is bullish sign.

Philadelphia fed survey(10 EST): 5 or higher is bullish while negative or 0 is very bearish sign.

I am little bullish this week only till Friday. 

Stocks likely to open high : PSTB, PXLW, TLB, VRX

Stocks likely to open low: BPAX (buy for quick profit but sell it), KAR, TNS, TWI