June 22nd, 2012
in Gary's blogging
Midday Market Commentary For 06-22-2012
The markets have been wandering up and down all morning in a narrow range and the most anemic volume I have seen in months. Forget about whatever is going on today in the charts as it ONLY reflects the HFT and DaBoyz doing their thing. Traders, investors and Pros alike are literally sitting on their hands today waiting for some good news from the EU. Oil has fallen considerably over the past few session and typically that is bullish for the markets. Only this time it reflects a depreciating World economy and the stock markets haven't realized this yet. They will soon and fall to appropriate levels reflecting the true and scary nature of the failing economy's of the EU, China, India and the US. The markets can not continue to stand up to the relentless failing economic eroding effects.
The markets at noon are just about where we left them in the Opening Market Commentary.
The DOW is at 12639 up 66.49 or 0.53%.
The 500 is at 1331 up 5.78 or 0.44%.
The $RUT is at 770.82 up 6.00 or 0.78%.
SPY is at 133.06 up 0.61 or 0.46%.
The trend is neutral and the current bias is neutral.
WTI oil is at 79.46 trading between 78.90 and 77.59 and the bias is up.
Brent crude is at 90.56 trading between 88.50 and 91.06 and the bias is neutral.
Gold is down today at 1563, trading between 1558 and 1571 with a neutral bias.
Dr. Copper is at 3.29 down from 3.31 earlier.
The article below reflects my opinion as well except that I am a bit more cautious in knowing full well Mr. Market can at anytime pull the rug out from under you. As we have NOT reached a stage where a decline is in full swing I remain cautious. Yes, I have several shorts going, but low on the percentage side with a pocket full of cash. We are close, but not quite there, could even be Monday, need to have your finger on the buy switch. What he did not say is that EEM's 50 day MA has not only crossed the 100 day MA, but the 200 day MA as well – VERY bearish.
The Market's Final Short Opportunity? by Macro Economist
“Not that it should be a surprise, but to me it proves for the umpteenth time that very few investors actually have a view, rather for most, the most recent stock movement is what dictates bullish or bearish posture. Reasoning is saved as a post-mortem rather than a pre-trade exercise. . . I conclude that current prices may provide the last and best opportunity to be short for the current economic (4 year) cycle. . . Since none of the indicators I look at have shifted meaningfully and we are now quite overbought on a short-term basis, engaging on a short-entry at a downward sloping 50 day moving average, at the upper end of the Bollinger Band, with a 3 month negative ROC would present itself as a good risk/reward trade at the very least. . . what I can say is that the fundamentals and technicals as of late have not meaningfully improved so I can only take current levels as once again being a fantastic and perhaps the final short opportunity.”
Having read that, fellow investors need to remember the Golden Rule is that who ever has the gold, rules. In this case it is Germany that has all the gold and WILL dictate to the rest of the EU and their 'slow to learn' politicians what the terms are. These lessor members can blow all the hot air and steam they want to make political hay in the MM, but until Merkel says 'Ja' it isn't going to be so.
“After a series of idiotic pleadings by Europe's broke insolvent countries that everything is now all fixed, Merkel decided to put some order into the house and reminder everyone who actually still has money:
MERKEL SAYS DIRECT BAILOUT FUNDING OF BANKS VIOLATES TREATIES
MERKEL SAYS GERMAN TAXPAYERS WANT GUARANTEE ON HOW AID SPENT
Which is funny: because the Golden Rule is that he who has the gold, makes the rules. And the rule is, and has always been, that the "guarantee" for further bailouts will be even more gold. Physical not metaphorical.”
If that article wasn't enough just read the article by Colin Lokey below. Investors need to read the entire article just in case you have been out to lunch for the past 6 months or just don't have a clue to what exactly is going on.
“With the Fed in the rearview mirror, the market is now free to get back to its daily business of finding ways to dismiss reality by grinding higher in the face of economic news that is bad and news out of Europe that is worse. . . In sum, the economic recovery has all but ground to a halt and the Europeans policy responses to the debt crisis are becoming more inadequate and more frighteningly absurd by the week. Investors would be wise to recognize the fragility of the current situation. Short S&P 500, short Nasdaq, long volatility.”
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Written by Gary