Market is gapping down 15 points at this moment after socialist Hollande wins the presidential election in France.
Hollande promises lowering retirement age to 60, raise taxes to 75% to people who earn over 1.3 million USD a year and stopping austerity.
This in my opinion is demented, especially given the fiscal condition of Europe and France.
I think bond vigilantes will have a feast with French government debt and the European crisis might start to worsen from here.
Technically the market started a bounce from ultra oversold conditions on April 11th and a buy signal was generated in April 25th.
However breadth and buying interest was weak during this whole period and we could observe a lot of failed breakouts and breakdowns in leading stocks.
The main indexes are breaking down and things are not looking rosy.
After a failed buy signal, the correction / downtrend could get a lot stronger this time and a test of the 200-150 day moving averages in the major indices is in the cards.
The macro environment ( which constantly dissapoints) and the situation in Europe doesn't help at all for a bullish scenario.
On Friday we took some profits and mostly losses on most of our open trades.
I would recommend to you to get off margin, reduce your long exposure, take profits and take small losses before they become large losses.
If trading on the long side, reduce position size and use tighter stops.
Raising cash to wait for better opportunities and avoid risk is key here.