I’ve posted numerous times in comments sections about my absolute enmity for ZeroHedge. It propagates fear at any and all costs–especially at the sake of, you know, actually banking coin. In fact, there are few financial sites on the interwebs that offer less actionable trading ideas. If you think it reads like a jaded investment banker who just got kicked out of the “club,” then you’d be right.  At its worst, it’s a mecca for bearish confirmation bias. At its best, it’s a phenomenally accurate contrarian indicator.

If you peruse ZH right now, you’ll observe a community that’s lathering in Europe’s gross incompetence. As they go from six to midnight and futures bleed lower, it’s extremely easy to resign yourself to selling the open and loading up on puts. But no, no, my friend, that’s not how this game works. You need to dig beyond the headlines plastered across ZH. For example, note the following from Reuters:

Eurobonds will exist at some point in the future but are not suitable at the current time given insufficient integration among euro zone member states, European Central Bank Executive Board member Jose Manuel Gonzalez-Paramo said.

 

So while ZH is busy telling you how Merkel has, for the umpteenth time, spurned the notion of Euro Bonds and how this means that it will therefore never, ever happen, you need to read the above and connect the dots–namely, Europe is in the midst of sorting its way through a coordination problem between the ECB and sovereign governments. Once some semblance of fiscal integration is achieved, the presses will be revved up. In the meantime, Merkel cannot concede anything until the sovereigns are de-sovereigned. It will happen. And likely much sooner than any of us think.

I covered my CRM short the other day and with the proceeds bought some WNR and a lot of EXK, AG. I’m prepared for a leg lower here, even a break of the vaunted Bennett Bottom (though this would truly be a scary, scary test). Regardless, at this point in time, with all the Zero Hedgers screaming from the rooftops, claiming victory over the sheeple and the rest of the civilized world, the high probability trade here has to be long. Now that the turkey gods have been devoured for their total insolence, we need to prepare ourselves for what’s likely to be a Santa Rally into the New Year.

Update: Giddyup

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