Market Instability
P/E Contraction
No Free Money
Slow Motion Euro Meltdown
Earnings Peak
Political Freeze
Plus we’ve retraced a perfect 50% of the recent crashette.
Quantitative Easing is now been proven to be a dismal failure, yet the market waits for it. Boosting asset prices might have worked if they restructured the debt, but they did not. Now QE2 must be completely given back.
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Lets all jump like it’s 1929……jump….jump
http://www.youtube.com/watch?v=010KyIQjkTk
See, the trick is to understand what is happening BEFORE it begins. Thanks for your participation and please don’t post here again.
You are spot on and I appreciate your advice….did I just post here again??? sorry.. Gheezzz grumpy we are.
What’s the $SPX level for a complete QE2 giveback?
I see your jump video and raise you the ETrade baby freaking out…http://www.youtube.com/watch?v=38bEi8wnXJA
Damn I hate you but wow you’ve been right with this market.
I hate to be cliche` but I care about the big cycle and not the day to day bullshit…
Scott,
so you see test of 1100 then the bounce or a whole sale sell off through it.
I see EUR/USD pair was again participating in this, but now stabalizing.
How the hell can the EUR stay elevated given the situation? insight please this thing should be at 1.00
cheers
It will strengthen before it weakens, just like the USD did in 2008. When you have a solvency crisis, you first get a liquidity crisis. That is what’s going on in Europe. Their banks need dollars, eurodollars, and euros. Demand is very high right now.
Totally agree. But as Scott has pointed out in the past, markets remain irrational until they are not. When the EUR really crashes the market will crater. The 64 Trillion dollar question is when.
When the machines tell us weeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee
Spot on once again Mr. B ! I actually did some repositioning yesterday based on your advice.
Gracias!
It wasn’t a failure for commodity prices. 😀 8)
Perfectly stated, the air is being let out of this irrational exuberance party – baby boomer retirement party let down. It is a pleasure to read your blog for reassurance on the same macro that I see to confirm sanity when economic is juxtaposed to markets.
I’m waiting for 1111 on the SPY for a market bottom although we can pop and drop a bit.
This will be like a psychological bottom and I believe our third test of this level.
I’m looking to pick a bottom and then buy SPY calls into the first week in September repeating last year going into a 3 day weekend, but we will need some fiscal stimulus or it’s lights out GD2. Obama’s next job and infrastructure stimulus can not be planning to plan to have a plan. The market drop will provide political cover for another program, and so far the setup is still intact.
Just sold TZA and sold SPY puts bought three days ago, thanks PPT. I have learned to follow the algo more closely than Fly himself for picking long and short term bias (only waiting for extreme over B/S).
not sure if 1111 if max pain for QE3, not to mention its half life is getting shorter. In order to get Reps on side I think you’ll need sub 1000 at least. of course, if there is a bank failure it will be put on no questions asked.
Hi Jimmy-
You may be right.
If SPY blows through 1111 (19% drop from 52 week high), my next stop is 999 (27% drop).
This has a numerology angle, psychological angle, and political angle similar to the last bottom at 666 – which is 999 upside down.
I’m looking for the impetus for more political will with pressure on Bernanke at Jackson Hole on the 26th and need a signal for a bottom. Politically, they need a rally into labor day weekend with pressure up to the 26th.
With Perry making anti-Fed statements, the private bank will most likely prefer to have Obama back in the saddle. So basically, I believe we will rally right after Jackson Hole but they might drop it right after the speech as another head fake, and follow it up 29th – 2nd zooming into the 3 day weekend. Obama will also be unveiling his job creation plan, so there will be an incentive for PPT to pump “Hope”. If the market doesn’t recover going into labor day weekend, I believe we can count Obama out of the elections.
My prediction is similar market action to the week before July 4th and I’ll be betting (not investing) in this scenario unfolding by buying SPY calls just before the 26th and probably more on the 29th.
Who has a better scenario? I nailed the July 4th run up on this blog in advance and believe I am doing the same right now. Of course, I am primarily in gold/silver/cash and only put small percentages at risk in short term options so follow at your own risk.
Revenge of the machines
might sell gld today, and nibble, im 54% gld in my port, some small pos. the rest cash. thanks for ur post!
Seems deflation is the only possibility for the bankers to cash in. They sell their gold at all time high, collect the dollars and contract the money supply. No?