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Hanging Like A Yo Yo
Submitted By Nic Lenoir Of ICAP
The market is being bored into oblivion trying to follow the political soap opera in Europe. One second there is an agreement, the next there isn't. The main problem right now seems to be that too many people who are quoted as "senior government officials" yet have probably no say in the final decision are allowed to express themselves publicly on the question, and there is no political/legal framework to administer the needed dose of bail-out. While more drama unfolds, it still appears to us there is no other solution than a bailout given that Greece's ability to deliver austerity is most unrealistic for now. Maybe the hope of politicians is that they will kill the momentum of the trade and won't have to deliver in the end, but the bottom line is that you have to pay your bills at some point and with debt refinancing coming up in April/May Greece has probably a vital interest in getting things sorted before that... The momentum would clearly reignite quickly at a bond auction!
To illustrate how markets are basically trading water until a conclusion is reached, a look at EURUSD is very conclusive. On the 15-minute chart we can see we are stuck in a sideways consolidation channel, and we failed overnight hitting the downtrend resistance of the last sell-off started at 1.4556. 1.38 is now the key resistance and we will exposed to more upside than downside as long as it is not bypassed and a political solution is aadopted.
Same comments on S&P futures where the market has not been able to break through channel resistance waiting for confirmation. Upon breaking out of the channel through 1,073.50 we should rally towards 1,100/1,107 which remains the main target zone to initiate fresh shorts.
Fixed income is a tad bit more interesting as the Bund tested the key resistance at 122.90/123 this morning again, for now rebounds towards 123.50/123.75 should be sold and shorts can add to positions once the support is broken. Similarly 10Y Treasury futures broke through the support of their channel and should sell-off further here. The KEY support is the 114-08/114-27 zone which should be very very well bid, but if broken would open the floodgates for a massive move in rates.
Good luck trading,
Nic
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"...bored into oblivion..." My second favorite ZH phrase.
Not to worry. PPT hitched up the dog sleds and made it to work just fine, but a little late. It's all going green now.
Someone(s) just put the spur to the horse. It just so obvious they don't even try to hide it anymore. The great unwashed masses are so grateful that their 401(k) is now only a 301(k) rather than the 201(k) it was 10 months ago that they will ignore anything so long as the statements keep coming up roses.
Don't underestimate the power of a deeply captured population. When it's in average Joe's best interest to ignore the blatant theft in order to continue to believe he can still have his cake and eat it too, it's real hard for the truth to come out. Or more accurately, for the truth to be accepted by average Joe.
The population is not asleep, they have pulled the covers over their heads and are pretending to be in dream land. Don't ignore the power of the Sgt Schultz defensive position, also know as "I See Nothing" emotional ignorance.
http://www.youtube.com/watch?v=34ag4nkSh7Q
Nic, can you give some thoughts on 10 yr futures there? (trend channel seems to be placed a touch high, no?)
Correlations seem to have completely disappeared today. DX up, bonds down, gold up, stocks... shockingly being bid up, AGAIN.
Can we just skip to the global debt jubilee/WWIII? Who knew a train could wreck so slowly.
Yeah, I'm getting bored to oblivion as well. Slow train wreck, good metaphor.
Maybe I'll just go back to doing something fun, buying gold. And / or pull some vodka out of the freezer. Or should I buy some Ouzo? Go with the flow.
So many options when one is bored...
Well they keep stepping on the brakes :-)
The fact that the whole financial world seems to be waiting with baited breath to hear what they come out with underlines the importance of it.
I wonder what scenarios the big investment houses have mapped out for bailout/no bailout.
The most likely result is a compromise that Germany coughs up some money, but calls it something else. Greece promises to enact austerity measures but doesn't and the rest of the Euro nations murmur that they'll provide support while bellowing how delighted they are to have found a solution.
The markets will have a relief rally that'll last exactly as long as it takes for the next crisis to come along (about 3 days). Or as long as it takes the politicians to go home and tell their domestic voters that of course they're not putting any money for a bailout of Greece
Straight line shuttle launch spike on the DOW? They really do assume everyone is a gulliable moron! FED/govt stock support team must be desperate to unload its foul booty to any retail fish they can find out there.
This is how things are done today; leak ideas like throwing s@&t at the wall to see what sticks. Who cares what might work to ameliorate the situation in the long term, when you are fleecing everyone in the short term.
How can those who cheer a new bull market justify their own pessimism about government policy; US or EU?
Au just went straight up $18 along with a stronger USD
Any news or are investors just loosing faith in all Fiat???
The dutch financiel minister (Wouter Bos) explained to the parlament that support to Greece as a whole EU or as individual states is out of the question!
So much for an Union!!
anyone read http://www.iamned.com ?
Saw on the news that 50% of Greece's workforce belongs to 2 Unions and that they are going to strike so that they won't have to bear the brunt of the austerity measures. Good luck Greece!
Presently, the utopia of Pan-European confederation is meeting the reality. Presently, for this reason the EU is politically, economically and intellectually in a deep crisis.
Will any bailout save Greece or for this matter the confederation? The answer is "NO" but it will delay a moment of truth. Anyone suggesting a Greece bailout has no idea of what he/she is talking about. The worst thing a cancer patient can do is postpone the treatment.
There is no way one can save a drug-addict by providing him/her with more free rugs.
Yes, it was a wonderful Pan-European dream. Now, it is a nightmare after a rude wakening.
"There is no way one can save a... [heroin]...-addict by providing him/her with more free rugs."
Unless you give him methadone. You tell him it makes him feel better, everyone believes you, but he doesn't feel better, yet no one knows it.
heroin = money
methadone = fiat money
Not true. At some point, somebody (i.e., Greece) is not going to pay their bills-- no matter the size or frequency of the bailouts given. Simply put, the EU needs to insure that Greece changes their behavior immediately-- or be prepared to provide unlimited funding for any EU member that can't help but spend more than they produce. We know here are others in line behind Greece, too.
If the EU can't get such assurances from Greece here and now, either default or going on the IMF 12-step plan to austerity are actually viable options for Greece, as draconian as it seems.
That being said, I do think a bailout is inevitable. Why? Becuase there are derivative bets being made in the shadows that would likely unwind if Greece went poof tomorrow. That's certainly something no one wants to mention.
So... while immediate austerity isn't possible in Greece, the EU needs to force austerity measures NOW (with timelines)-- to at least give this bailout some sort of legitimacy. And the EU needs to be prepared for Greece to default if they are not willing to live up to austerity measures.
It seems that the Germans are the only ones in the EU who really get this. Thankfully, they're holding most of the good cards.
" . . . that being said, I do think a bailout is inevitable. Why? Becuase there are derivative bets being made in the shadows that would likely unwind if Greece went poof tomorrow. That's certainly something no one wants to mention."
Except Goldman, holders of a buttload of Greek CDS.
Unfortunately the derivatives collapse would probably also take out Germany, so they will probably bail.
This derivative terrorism will have to be stopped by law enforcement, with hangings (think Nuremberg) if real damage is done.
Some large contracts, if not most, will have to be declared void by affected Countries (China did, others will do the same) and the parties can go fuck themselves in court over the cost of the contract, at most.
I bet you don't even like carbon credits as a form of currency. Remember it's all to bring about global balance of wealth which is why it's all being run by the IMF and central banks which have done nothing but screw the poor. You're just going to have to trust them. They got good intentions to hide behind.
Since when is it good news that a country has to be baled out!
Things are pretty awful if it has come to this, but good ole PPT/JPM/GS will keep the plates spinning with HFT in the hope that it all sorts itself out.
Up is down and all that
hat tip to: http://www.iamned.com .. crisis 2.0 begins. Dow 6000 soon
Why don't they just kick 'em out of the EU. I predict the EU is going to split into north and south sections eventually. The peoples of the semi-solvent north will not pay for the retirement plans of the peoples in the bankrupt south.
Ironic, the two most popular yo yo tricks are the "throwdown" and "the sleeper?"
Enough of the markets. Go long FOOD (plant real seeds not paper) GUNS and AMMO (Real steel not magazines) NH4NO3 (used to grow plants and is a key ingredient in human repellant) and BOOKS (Hardcopy not electonic) stock in blacksmith, woodworking, plant identification ect. Lastly, aquire a good set of USGS maps. Plan your exit strategy. GLD you can pickup on the way out.
When in doubt---------Run in circles-----
Scream and Shout
I told you so--no you didnt--yes I did--no you didnt--yes I did---when--the other day-what other day--yesterday--no you didnt--yes I did--what did you tell me--dont know---see you didnt tell me---yes I did-you didnt believe me---believe you what---that I told you--you didnt tell me anything the other day---yes I did but you wouldnt believe me---Im tired of this ---me too--lets go have a drink---OK---what about today---lets just wait for tomorrow--OK.
I don't get it, why does the US markets rally on the Greece solution again ?
The european markets did not btw.
Exactly. My little flow chart goes like this:
Greece bailout -> more Euro bailouts -> Weak Euro/Strong Dollar -> down US markets
Greece default -> evidence world economy sucks -> Weak Euro/Strong Dollar -> down US markets
30 year announcement in 20 minutes? Surprise on tap?
http://www.tradebit.com/filedetail.php/4049224-demented-lady-horror-soun...
nice site, I think this one best reflects my instincts. I also use it as a forecast model.
http://www.tradebit.com/filedetail.php/4050157-tortured-soul-horror-sound-effect-wav
Europeans equitys failed to find any relief from the statements (lack of detail) regarding Greece. But ralleid very strongly in line with the US markets. The technical picture has been confused again (and the Dow has punched through the downtrend resistance on the hourly charts) but it hard to like buying even when one knows `the pump & dump` teams never rest. Austerity in Europe means contracting ecconomies. The Pound remains weak against the hated euro for good reason. Public finances here are dire and we also have plenty of `off ballance sheet` liabilities thanks to Gordon Browns love of `private finance initiatives`. One in four workers here is a government employee, many have `non jobs` create to buy votes and curtail unemployment. Our manufacturing base is small so we will not be turning into an export led ecconomy any time soon. Instead our weak currency is starting to suck in inflation. I dont see any good reason to buy stocks, but Gold is becoming more of a must have by the day.
Not boring. The market is panning for gold. Slowly and steadily devalue the currencies...one after the other (not by default but by inflation) keep DJ at 10,000 so that all the simple minded folks think their pensions are safe, and get gold parallel with the DJ. This is the long term plan, and it will take a year or two until the average US citizen notices what is happening. By that time gold will be way too expensive for any "middle class" (is there such a thing?) still holding doelarrs (any currency) to buy.
Choppy sideways action with mixed signals for DOW / SP500 / EURO / COPPER continues.
The DOW / SP500 / EURO / COPPER downtrend will not resume until the ongoing support ceases.
So although trends on their daily charts remain down, more counter trend rally is possible.
http://www.zerohedge.com/forum/market-outlook-0
Previous choppy sideways action for DOW/SP500 and EURO have resolved once again to the downside.
Very choppy mixed signals continue but daily trends for DOW/SP500/EURO will always remain down.
So the SP00/DOW downtrend and the USD uptrend reasert their dominance yet again.
This trend will get stronger.
http://www.zerohedge.com/forum/market-outlook-0
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