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Turkey recalls diplomat and oil tankers

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Stock fell from their session highs after the BBC reported that Turkey had halted the movement of oil tankers across its boarder with Iraq and told tanker drivers that were already in Iraq to return back to Turkey. The report also said that Turkey's ambassador to Iraq has left Baghdad, leaving no Turkish diplomats in the city. According to the Turkish Foreign Minister, the decision was taken as to "not leave the embassy exposed to risk of uncontrolled attacks."

The news out of Turkey now finds the Dow Industrials (INDU) 7,862 -0.6% near its lows of the session and falling 47-points, after reversing early morning losses that built to a 16-point gain. The Dow's session low has been 7,853, and current trade still holds above the DAILY pivot of 7,849.90, which would be the first level I would look for any type of intra-day technical weakness to take place.

The broader S&P 500 Index (SPX.X) 834 -0.46 also reversed earlier gains that were found at the 840 level. Here too we've seen the SPX able to hold just above its DAILY pivot of 832.20, with a session low of 832.93, which actually came prior to the news out of Turkey.

Sector action is now broadly negative with the Combined Telecom Index (IXTCX) 112.43 -1.59% giving back some of yesterday's gains that found this sector as one of yesterday's biggest gainers.

The April Light, Sweet Crude Oil futures contract (cl03j) $36.95 +2.27% spike to a session high of $37.05, but just missed a 52- week contract high set yesterday of $37.10. The CBOE Oil Index (OIX.X) 243.42 -0.29% slips back under its shorter-term 21-day SMA of 243.88, after holding above this moving average the past three sessions and continues to severely lag the price gains seen in the commodity.

The NASDAQ-100 Index (NDX.X) 987 -0.96% and NASDAQ-100 Tracking Stock (AMEX:QQQ) $25.53 -1.04% have turned defensive after an earlier bid above the $25.81 level in the Q's. Today's news out of Turkey is "frustrating" to me as I actually turned bullish the Q's in today's market monitor on a move above the $24.81 level, was filled on the QQQ pullback in a bullish trade at $24.83, as the QQQ weakened from the Turkey news. However, the QQQ has now fallen below today's pivot of $24.60, and day trader's from that trade should be stopped out. While I'm "frustrated" with the trade, I fully understand the type of market conditions we're in and have to face the potential that "breaking news" of any type can quickly change the market conditions.

Treasuries reacted in a "defensive" manner as early session selling has turned into buying, but not overly so. The benchmark 10-year YIELD ($TNX.X) 3.796% has reversed lower after YIELDING 3.818% just prior to today's news event.

Jeff Bailey

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