DON'T LET LONDON BOMBINGS CHANGE YOUR TRADING PLANS -- MARKETS ARE DOING PRETTY MUCH AS EXPECTED

DON'T OVERREACT... This morning's news of bombings in London caused some initial panic selling in global markets. However, markets appear to be returning to more normal activity. In reality, there haven't been any serious market changes. Naturally, most of the overseas selling took place in Europe and the UK in particular. Some of those initial losses are being made up however. U.S. stocks were on the downswing before today's news and are doing pretty much as expected. Chart 2 shows the Dow still headed toward its spring lows. Chart 3 shows the S&P 500 headed toward its 200-day moving average. Both of those downtrends were in place before today. Bonds are bouncing in a flight to quality but nothing to change their price trends. Crude oil is pulling back after yesterday's sharp gain. And an oversold gold market is bouncing. Transportation stocks are bearing the brunt of early selling which is also to be expected. But they were already on the defensive from rising oil prices. Amgen is hitting a new 52-week high extending the bullish breakout that started yesterday (Chart 1). The message here is to stick with whatever trading plan you have in place and don't overreact to the day's news.

Chart 1

Chart 2

Chart 3