Swiss sucker punch global markets

Jeff Macke Yahoo Finance 
By 7 hours ago
Stock futures on a roller coaster ride this morning because of something the Swiss did. Really. The Swiss National Bank (SNB) said they were abandoning the Franc -- Or "swissie" -- link to the euro. Analysts are still figuring out what this means on a global basis. The knee-jerk reaction was a 2% drop in U.S. stock futures before rebounding. If you think that's aggressive consider it in the context of a 30% spike in the price of a swissie tracked by the CurrencyShares Swiss Franc ETF (FXF) and an absolutely devastating drop in the Swiss stock market tracked by iShares MSCI Switzerland Capped (EWL)
This is going to test the resolve of bulls who bought the dip yesterday. People went to bed last night thinking the S&P 500 (^GSPC) had at least temporarily held support at 2000. That's been blown all to hell overnight for the most unlikely of reasons. Any boxer will tell you it's the blows you don't see coming that knock you out. No one saw the Swiss cutting off their nose to spite the euro's face.
There are going to be forced sellers in markets today. The action in Europe is just another dislocation in markets that create downward pressure as margin calls and weak hands cash out. You can wail and mope about it all you want but you it won't help. I've been talking about the dislocation in oil (CLG15.NYM) being bad for months. Today is what it looks like when big money gets sucker punched on an enormous, international level. For old timers it's good theater. For newbies it's a terrifying introduction to chaos theory as it relates to investing.This is now officially a Very Important Day. Two levels to watch. First is 2000 on the S&P 500. It held yesterday but the longer we trade below that mark the more likely it is to break. The second level of note is 1972. That's where we bottomed in December. If we break that, particularly on a closing basis, the V-bottom trade will be officially dead and buried.
There's nothing left to say for now beyond reminding you that you don't have to trade this and most people probably shouldn't. There are larger forces at work here than U.S. earnings. Whether you're boxing or trading the first rule is to back up when you get confused or else you're probably going to get punched in the face. Right now the market is very confusing.
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