Trying to figure out why the market is taking such a big hit this morning. Combing the chatter, a few things pop out:
1. The obvious, US economic data, slower personal income growth and a decline in consumer spending.
2. China stops Yuan borrowing from Hong Kong. This should curb cheaper Yuan to re-enter the main land, and facilitate in curbing inflation (and some economic growth).
3. Italy and Spain bond yields continue to raise. Italian authorities will meet today about this.
4. Birmingham maybe further a head to declare bankruptcy. (This one is not in the media as much this week, but may be playing a role behind the scenes.)
As of now, the decline in equities is correlated to weak economic data. Although, I would like to point out that the jobless claims last week were nice, and the market did not move.
From a purely technical perspective, the SP500 may want to test the 1250 area. That is some pretty heavy support via the Daily and 14-monthly-SMA.