Clearly the EU has acted like Alfred E. Neuman and completely miscalculated the Greeks. As I wrote months ago our friend Yanis was a man to be watched. If you listened to him he has always said that Greece has nothing to lose since they are insolvent. He understood that to go down this path of continued bailouts was insanity. The EU, IMF and ECB seem to have misjudged the Greeks and their resolve. The Greeks really have no choice but to default given the Troika position of bleeding them dry.
Markets never top on Bad news. I don’t expect a crash to commence on this news but I also don’t think we get a shallow dip either. My best guess is that we bottom sometime in July and commence a rally that should be faded. If the CB’s freak out here and employ bazooka intervention then all bets are off and I have no idea what happens. They would be better served to draw in the shorts and then intervene. I do think this is the beginning of the end. We got a 5th Hindenburg Omen on Friday as well. The crash window remains between now and October. This will be a very tricky volatile market.
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July/August 2007 may serve as a guide.
Out of sheer curiosity and naïveté on my part, any historical correlation with the number of Omens in a specific (narrow) time period and a higher incidence? Or depth/length of downturn? I caught your previous article (kudos on that, btw. Very interesting) about the 25% chance, just wasn’t sure if there was increased correlation.
Thanks!
Blue do you have levels in mind for the S&P for a July intermediate bottom?
me wonder if gold/silver are a tell here that this decline will be mere child’s play ?
if this was THE mother of all sell-offs, I’d think gold/silver would be getting on it’s giddy-up but nada
nocturne,
agree
strikeback,
no data but more is likely not good.
superpositron,
i am guessing 2040. may bounce a little before we get there.
juice,
i am looking for gold and silver to bottom next year.