Last minute sell off was preview of tomorrow: Stocks for Dec 9th: #POT, #VXX, #FAZ, #TZA, #FLOW,

Eur/Usd now near Sept lows.

Tomorrow is the last day of EU summit. Tomorrow or Monday could be a game changer when there could be biggest sell off unless EU comes out with some plan. The day started with the hope rally that ECB will cut more the 0.50bps or more and they would buy bond aggressively. But the ECB disappointed the market by cutting the interest rate only 0.25 bps and they declined to buy bond aggressively. ECB announced that Euro zone is officially in recession and it would last till 2013 & this set the tone for the rest of the day. The stock made nice pull back in last 45 minute on the rumor about ESM will run along side EFSF from July 2012. The dow cut off from 180 point decline to 80 point. Then some unknown German official decline to accept ESM proposal. So the stock sold off from 80 point to 220 point in 10 minute.

If Nasdaq sells off more then 30 points then its bear day. 

EU leaders are fooling the market again, first they came up with fiscal treaty changes by March 2012 and now there are some talks about ESM from July 2012 and lastly any detail about new proposal will be officially given on coming Monday. 

My take is EU haven't even implemented EFSF which was decided during last EU summit. They are planning for fine and sanction countries who doesn't control their budget deficit by 3% of their GDP. There is no detail about what will be fine or sanction or how it will work. 

S&P500 has very big resistance at 1265 which it could not hold. Now the next resistance level on the downside is 1220. DJI has upper resistance at 12232 which it could not hold either. Now the next level to watch is 11862.

Again the market is not safe for long term investor at this time, it changes very quickly. Since its officially announced that Europe is in recession, it will be very interesting to see how the market behaves in coming weeks.

Consumer sentiment (9.55 EST) 66 or higher is bullish sign while 65 or lower is bearish sign.

International trade (8.30 EST) -43.4 or lower is bearish sign while higher would be bullish sign.

Tomorrow, China CPI data and EU will decide the fate of the rest of day. If the consumer sentiment fall then it will add fuel to the fire on a bearish day.

I am making list of stocks for long term investor (NOK, HAL, BAC, MS, WYNN, GLD, WLT, PCX). Wait for the bullish day to get into this stock.