That money printing got the markets into 2011 when the August 2011 waterfall crash occurred, the SPX once again crashing down thru the 12 MA to signal nothing but misery ahead for bulls, fun times for bears. But the Fed's Operation Twist and the ECB's LTRO 1 and 2 programs saved the day this time. Note also that the full-fledged global coordinated quantitative easing is in full affect at this point, a race to the bottom by all major currencies. This pump got us into 2012 until the April top and large sell off during May this year. Once again, the central banksters came to the rescue, since obviously at this point the markets are only junkies, needing more and more crack cocaine monetary stimulus to survive. The rally since the 2009 is due to money pumping and not a healthy recovery. Nonetheless, Draghi's promise on 7/26/12 to support the euro by all means necessary, followed up by the ECB OMT bond-buying program announcement and the Fed's QE3 in early September, created the late summer rally thru October.
That is the sordid path to bring us at a major decision point. The 12 MA is 1369. Bad things are going to happen quickly if 1369 fails. The market bulls must hold 1369 with all their might. What do you think? Will the cross occur today, tomorrow, or in the coming days? Make preparations. The concern this time is that QE has lost its effect. Thus, if the SPX fails 1369 it may lead to an excessively long period of pain, many months. An interesting test will be when Spain requests the bailout. Rumors of the bailout bounced the equites markets yesterday. When Spain requests the bailout to free up the ECB to finally start buying bonds, an equity rally is fully expected, that rally will tell a lot. If it peters out and fails, then all hope is lost for QE from here forward. If the rally can become more extended and sustainable, the QE money printing presses will continue to keep the leaking boat afloat. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added 11/14/12 at 6:43 PM: The SPX dropped thru the 12-month MA today signaling failure and a Cyclical Bear Market for the weeks and months ahead.
Spain is overblown.
ReplyDeleteplanned 25 percent increase in the price of public transport tickets next March is to be postponed until October, the general secretary of the Development Ministry, Nikos Stathopoulos, said on Tuesday. The increase originally demanded by the troika would have pushed the price of a ticket for all modes of public transport to 1.75 euros from 1.40." Instead the Troika's demand is overruled, and in its place is a promise that some efficiency has been extracted elsewhere, until of course, said promise is probed and uncovered to have also been
Anon, Spain is simply the trigger for the ECB's OMT bond-buying plan. A bailout request is probably not likely until after the 11/25/12 elections and it may not occur until December or into 2013. Spain is simply the trigger to create the ECB's action to apply stimulus, this will immediately improve Italy's situation, so the improvement in Europe will bounce all the equity markets. Then we see if a roll over occurs of if the ECB's pumping can keep things afloat.
ReplyDeleteAlso note how the trigger for the central banksters to act is the failure of the 12 MA, so if the drop occurs under 1369, vigilence is needed since the CB's will step in at anytime and the markets will immediately jump higher.
You should write for CNN. Phrases like "waterfall crash" really get your attention. I always wish they'd run a picture of a guy adrift in a little dugout canoe. "Uh, where's my paddle? I guess I'll have to use my hands then..." But you know a little too much for CNN.
ReplyDeleteThat sounds like work Shane, it would cut into Keystone's hammock time.
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