Europe Fixed, Not Fixed: Dave's Daily

NEW YORK ( ETF Digest) -- There are plenty of Black Swans to trip up markets and bulls. Some are known (eurozone, Iran, China economic contraction, a purge in China, North Korea, Syria's non cease fire fighting, oil, currency wars and so forth) and are hovering over investors. Bulls would like to see them as nonthreatening, but then they come back to haunt them like tar balls bobbing to the surface in the Gulf.

Bulls might argue that a correction was due after outsized first quarter gains. They appear to be right for now unless current selling builds on current declines. One thing is clear; equities are short-term oversold so a bounce could occur at any time. Nevertheless stocks were sold hard most of the day with few leading the way lower as selling was widespread.

They may not get much help from earnings since outlooks have been cut sufficiently which paradoxically could lead to beats. All this will start with Alcoa (AA) earnings which are usually a complex mess to understand anyway. AA earnings beat estimates which shouldn't surprise given all their warnings and lowered estimates by analysts. This is typical for many companies: give terrible guidance, see analysts' lower expectations and then beat on the news.

Gold (GLD) rallied sharply as worries about the eurozone (IEV) and other global risks intensified. Oil (USO) prices were weak, the dollar (UUP) was mixed and bonds rallied sharply.

The eurozone debt issues are widespread with Spain (EWP), Italy (EWI) and Greece (GREK) once again taking center stage. The Financial Times came across a leaked memo outlining much of the regions troubles as noted. The IMF remains a component here and U.S. taxpayers could be asked to pony-up more money. The average American hardly knows anything about U.S. commitments to the IMF or even what the acronym stands for. Is it a new Apple app?

Volume picked-up sharply as investors headed for the exits exacerbating the flight from equity markets. Breadth per the WSJ was close to a 10/90 day.

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