U.S. Stock index futures are trading sharply lower ahead of the open on Thursday, as Europe and the UK cut interest rates. This is helping to boost the Dollar Index to three year highs, but its overall gains have been somewhat muted as it is still trading within its recent ranges against the British Pound and the Euro.
No real surprises in jobless claims data out this morning, but productivity figures contracted.
The main news out is that GM's auditors suggest its viability as a going concern is very questionable. Without continuing help from the government, GM will need to start liquidating assets. That is what is pressuring futures prices this morning.
Obviously, many stocks will open to the downside today, but I am not sure there will be much follow through considering that the employment report is due out tomorrow. With that in mind, day traders can likely expect a choppy session with a downward bias. However, if Tuesday's lows are violated, watch for more weakness.
I will say that at this point, sentiment is quite bearish and the mood is bleak. Watch out for any upside surprises that could potentially spark a sharp rally, as a lot of short sellers will get caught with their pants down. Until then, however, the trend is down, and rallies will be viewed as shorting opportunities until we finally get a follow through rally.
More to come!
Scott Cole
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