The downgrade ax will fall later today on France and Austria. But if the U.S. downgrade history is your guide, it should bring a “buy the news” reaction. Maybe not this time as my guess is that virtually all this years chasers of equities will be underwater in a short time.
Spain has borrowed $150 billion in each of the past two months. The $600 billion Euro Bailout Fund is going fast. But the stock market will worry about it when the money runs out. The reality is that expectations are for QE3 before it does and just in time for the elections. QE3 should do wonders for the economy…
Indices are at the top of the range and many technical indicators have gotten technical types long over the past few days. Remember, we have rallied in an uninteruppted fashion through the holiday and since the ECB Bailout fund became a reality on December 20, 2011.
Volume remains insanely low. Spikes continue to be pre-market. And the short squeezes have been everywhere. Interestingly, short squeezes happen at the beginning of a rally phase or the end of a rally phase. Which one do you think we’re in?
Have a great long weekend!
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Your posts are some of the greatest market commentary out there…but what to do, what to do now? I am majority cash, because I need to manage risk.
What if QE3 is a reality? No one wants to miss that train. Statistics for election years favour an up year.
Downgraded as they ought to be. The idea that countries who are unable to print their own currency can have a better credit rating than the largest, most dynamic economy in the history of our planet is just silly.
Europe doesn’t matter – Dragi is Italien for Bernanke. I don’t think the US does either. Our company sales to our California distributors are off by 60-70% year over year in January so far. ISM should be negative next month and train carloads just fell off a cliff. But Bernanke lives on and banks continue to lie about their earnings so up we go.
I also want to work at sp soo that I trade weekly puts….fuckers
btw still with your 1170 call?
I made that forecast on November 9th near SPX 1270. 1160 was tagged on November 23 before the latest “Magical Mystery Rally” that occurred at the beginning of December.
The next pullback will test SPX 1220-1230.
This market LOVES bad news. Chews it up and spits it out like nuthin. Heck we need more bad news out of Eurozone so we can have the futures gap up 300 points. Party on!