Do you remember what happened in the market at this time last year?
Markets were dealing with the end of QE2 and we had been moving sideways and under Distribution for several months. Then suddenly and out of nowhere the market ran 80 SPX points in a few days in a “Magical Mystery Rally”. The circumstances were so bizarre and unexpected as to excite market participants into thinking that perhaps the economy had turned the corner.
But it was not meant to be. In fact the SPX rally began and peaked ALMOST EXACTLY where it is now.
The reason for last year’s Magical Mystery Rally was that Reality was perceived to finally be setting in and there were significant bets made on the short side. Does that sound even remotely familiar?
This year is a virtual Carbon Copy of last year technically. And fundamentally it is worse. But there are no worries because the Markets have been “RingFenced” by Central Bankers, just like the Banking system.
6 Responses to Remember this Week Last Year?
Bleier, ever the party pooper/voice of reason … take your pick!
That’s not what Fly says… But the PPT seems to agree with you.
Starting in July last year, the VIX blasted off into the 40′s and stayed there for a month. The moves up and down last summer (and 2010) were huge in comparison to what we have seen so far in 2012.
I am thinking there is another 2-3 weeks left of blue skies left this summer.
Awesome post Scott. Spot on.
With the amounts of debt that are known and unknown .. so massive…
Central Bank policy and “ring fencing” is a futile attempt at a mathematical impossibility.
Equations need to be balanced.
And with so much debt, massive unemployment, and especially contracting economies, (when the e in a PE ratio will decrease.)
The outcome favors the unbalanced equation.
And eventually Big Bens machine and the holy green will come again.
Once more into the breach.
So it stands to reason the rally this year would end higher than the one that ended last year.
reuters has an artical about the euro woes are rising, some will block the bail out. humm. were in the same boat again?