August 6th, 2012
in Gary's blogging
Midday Market Commentary For 08-06-2012
By noon NOTHING news worthy had occurred and the volume went below anemic while the markets just sagged a bit. Where are DaBoyz and the HFT crowd when you need them to push up the markets? Seriously, we are at a point of reflection of where do we go now? There are those who see the markets climbing unabated and just as many see a correction at one point of the spectrum while some see a full bloom financial disaster in the making.
I have no problem wishing for the best, but that is exactly what it is, wishing. It should have been clear from the onset that their isn't enough money in the taxpayers pockets either in the US or the EU to support the grandiose plans to bailout politicians mistakes. Today is a good example of investor indecision, even the manipulators are having a bad time of it convincing the 'sheeples' to jump in.
Market manipulations such as the QE's, HFT, Twists and outright fraudulent activities have cast a dim outlook for the market place ever returning to a honorable place of worthwhile investing. The goose that laid the golden egg for many of us, including the long gone mattress money folks, has had its neck broken by the current idiotic Keynesian money wranglers and it isn't going to end well. This group includes the High frequency Traders, destroyers of common market values, narcissistic inept politicians and the criminal groups that continue to run slipshod over Wall Street without fear of prosecution.
So where are we going in this market? Personally, I lean towards a nasty correction as I think we have advanced beyond the point of no return. Just one little 'Black Swan' event and the crisis will be upon us regardless of whatever new magic potion the World politicians serve us.
The RRR** is very narrow today and trading, like most of this year, has been a guessing game with small profits to boot. Charts have been useless and marred to intelligible scribbles on paper. Time again to sit back and watch the show unfold.
The DOW at 12:30 is at 13178 up 82 or 0.63%.
The 500 is at 1399 up 8 or 0.58%.
The $RUT is at 796.70 up 8.22 or 1.04%.
SPY is at 140.12 up 0.77 or .55%.
The trend is up and the current bias is neutral.
WTI oil is at 92.10 trading between 92.20 and 90.63 and the bias is positive.
Brent crude is at 109.24 trading between 109.35 and 107.91 and the bias is neutral.
Gold is up today at 1612 trading between 1602 and 1615 with a positive bias.
Dr. Copper is at 3.39 up from 3.35 earlier.
Earlier the USD tumbled from 83.60 on 8-2 to 82.13 yesterday and has recovered to 82.36 with a negative bias.
Very much worth noting perhaps, the first criticisms of Draghi´s bond plan have come out of Germany over the weekend, and from two influential opinion leaders in that country as well as in the wider Eurozone, Juergen Stark and Otmar Issing. The former, who left the European Central Bank (ECB) over disagreements with its President over the central bank´s purchases of sovereign debt, has warned that the ECB´s independence is coming under threat. Mr. Issing, an ex-ECB chief economist, sees potentially massive inflationary threats arising from the ECB´s new plans.
The President of Germany´s BDI industrial association, on the other hand, has warned of the incalculable risks for Germany should the single currency break up.
Of some interest as well, economists at Barclays have been cited as saying that the ECB will only buy Eurozone government bills, not 2 year debt. That as analysts debate just what exactly "short-term" means. In the economic literature "short-term" usually means up to two years and sometimes even three, comment analysts at Digital Look.
As far as strategists´ reactions are concerned, these are mixed this morning. Goldman Sachs, Credit Suisse and Bank of America are being cited as waxing optimistic, whereas Barclays and JP Morgan are being cited as more wary.
On Sunday, Bank of Italy Governor Ignazio Visco said that at the moment his country does not need to ask the euro zone's rescue funds for aid. That came as Italy´s President warned in the German press that, "the tensions that have accompanied the euro zone in the past years are already showing signs of a psychological dissolution of Europe."
The Sentix gauge of Eurozone investor confidence fell to -31 points for August from -29.6 in the month before.
Fears of a protracted recession will intensify today amid signs that Britain's manufacturing engine room is running out of steam. Publishing its latest SME trends survey, the CBI said sentiment among small- and medium-sized manufacturers had deteriorated, while output had fallen for the first time since autumn 2009. The business lobby group, which polled hundreds of firms across the UK for the quarterly report, warned of a "challenging" domestic backdrop, uncertainty over the Eurozone and a "broader loss of momentum" in the global economy.
** RRR = Risk Reward Ratio
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Written by Gary