• 657 days Will The ECB Continue To Hike Rates?
  • 658 days Forbes: Aramco Remains Largest Company In The Middle East
  • 659 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,059 days Could Crypto Overtake Traditional Investment?
  • 1,064 days Americans Still Quitting Jobs At Record Pace
  • 1,066 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,069 days Is The Dollar Too Strong?
  • 1,069 days Big Tech Disappoints Investors on Earnings Calls
  • 1,070 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,072 days China Is Quietly Trying To Distance Itself From Russia
  • 1,072 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,076 days Crypto Investors Won Big In 2021
  • 1,076 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,077 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,079 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,080 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,083 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,084 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,084 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,086 days Are NFTs About To Take Over Gaming?
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

A Few Thoughts

A few thoughts as we continue to criss cross the equity market range.

My lofty expectations for a classic capitulation and turn-around Tuesday were passed over for what appears to be six more weeks (days - hours?) of winter, or whenever the European political channels breakdown - and then mysteriously find their respective pigeons deep inside the trenches. A crisis such as this will inevitably climax in a panic. The question is will it open another leg lower - or just a brief exploration beyond the technical range. At this point, I have dropped a touch of the bullish bias I had with regards to the range, because we have yet to experience the psychological closure the market needs to find any lasting traction. It is disconcerting in the sense that there is a tangible deadline set for early November and we have yet to even enter October. Too much time within the range could work in the bear's favor for eventually breaking through it and adding another leg. Color me agnostic in the very short term, but spiritually bullish if and when the euro's grim reaper reappears.

I have little doubt that the EFSF will not be levered up to the degree it has been hinted at, despite the claims of repulsion by Germany's finance minister. As I have stated before, it is just political theater and he needs to act the part, especially considering Merkel's fragile party grip. The fact remains there really is no realistic alternative that will address the severity of the banking issues associated with the sovereign debt overhang.

It is interesting to note that when I consider the respective pieces that need to come together to resolve the crisis and the potential issues that could upset the already weakened apple cart, I am very much against taking on equity exposure here. That is also the case when I apply traditional TA to the charts. However, the main driver for me to lean more bullish against the conventional analytical wisdom is when I compare previous market environments (aspects of late1998 & late 2002) to the one at hand - and knowing how far back the sentiment band has been stretched with considerable capital powder. It is between these poles that I will continue to be opportunistic in the short term and look for opportunities over the long term.

1998 SPX RUT Gold:Silver
Larger Image

As in 1998, the S&P 500 has led the Russell 2000 out of the retest we had last week. However, it should be noted that the spike in the gold/silver ratio has been flattening out as we move through the back half of the week.

2011 SPX RUT GLD:SLV
Larger Image

As always, it is a very fluid situation that can change on an hourly basis - so stay frosty.

 

Back to homepage

Leave a comment

Leave a comment