As another day unfolds we have no real solution to the problems in Europe. Germany is stuck in their ways and this is going to end badly. We’ve effectively accomplished nothing since May as you can see in the chart below we’ve been trading in this range. Shorted the lows for breakdown? Bought the Highs for break out? You got your face eaten off by bath salt zombies. The few trades that are were working became so crowded that they finally started to break down today. Where does that leave us? You keep hearing every week “We’re in no man’s land”. I don’t see TLT dumping at levels that would make me confident about going heavy long here, but also last minute hope headlines make shorting too risky as we saw today.
Today’s EU Growth solution is a complete joke and the market is laughing. European Union’s 120 billion ($149 billion) euro plan to promote growth is a worthless. Let’s get this over with already either print money , Germany should leave the Euro, or the let thing fall apart now. Spanish bond yields are not sustainable at 7% so this game can’t go on for much longer. It’ll probably end up being printing solution, but it’ll come at the final moment. If you thought the euro problems weren’t bad enough we have our own issues brewing at home. You can expect a lot of mud slinging to go on this summer over the fiscal cliff issue which hit the markets heavy last summer.
Finally, earnings for this quarter are not shaping up to be catalysts for most stocks. Evidence of that is clear with NKE today showing you clear weakness in China which may end up not being soft landing after all. Even shit stores like the Family Dollar which has been on a run since 2009 showing signs of weakness now. Overall it doesn’t paint a good picture of things to come.
Still holding 1250 SPX target.