July 10th, 2012
in Gary's blogging
Midday Market Commentary For 07-10-2012
By noon the markets melted down to Friday's session numbers as we await news from around the World. Volume has fallen to anemic levels again as investors sit on the sidelines looking for guidance. It would be my counsel to jump ship while you can. The RRR** is to thin for trading and narrow enough to cause swing traders pain if the markets move in the opposite direction you were expecting. Having said that, I still hold my bearish tendencies for further market decline in the near future. The market appears to have similar feelings as we travel sideways looking for signs of a bear party about to begin.
Euro-zone finance ministers have agreed to a €30 billion aid package that can be made to Spain by month’s end, and in response, both Spanish short- and long-term bonds’ yields have fallen back. However, with uncertainty lingering (how many more bailouts will Spain need?) the Euro has fallen across the board.
The DOW at 12:30 is at 12748 up 11.70 or 0.09%.
The 500 is at 1350 down 2.29 or -0.17%.
The $RUT is at 801.99 down 2.82 or -0.35%.
SPY is at 135.05 down 0.27 or -0.20%.
The trend is neutral and the current bias is down.
WTI oil is at 84.92 trading between 85.96 and 84.65 and the bias is neutral.
Brent crude is at 98.89 trading between 100.32 and 98.20 and the bias is neutral.
Gold is down today at 1586, trading between 1581 and 1600 with a neutral bias.
Dr. Copper is at 3.39 down from 3.44 earlier.
The German high court is kicking the can down the road in saying it will take 3 months to deliberate the ESM verdict. We have been pushing the ultimate European survival down the road again which can only bring us closer to the dissolving of the single currency holding the European Nations together.
Earlier today, when futures were soaring, we rhetorically asked whether "A German Constitutional Court Delay Today Cripple The EUphoria?" a delay which "could have “serious economic consequences” for the Eurozone as well as Germany, and in turn would risk placing the entire euro project “in question,” Schaeuble warned." Specifically, in terms of timing we said "Judges during the hearing suggested a two-part decision was likely, first on the injunction in about three weeks, and then in early 2013 on the broader constitutional question." Moment ago, according to CNBC's Sylvia Wadhwa, the court has announced the delay could be as great as large as three months, which in turn would put the Schauble scenario into play.
** RRR = Risk Reward Ratio
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Written by Gary