This page has been archived and commenting is disabled.
Art Cashin On The Clash Of Market Reality With Post-Summit H[o/y]pe
It is always amsuing to listen to market narratives, however goal seeked they may be, when presented by market veterans such as Art Cashin, who in this case deconstructs the violent clash between reality and post-summit hype as represented by yesterday's amusing market action.
From UBS Financial Services:
Reality Overwhelms Post-Summit Hope - After a weekend of analysis, economists and traders realized that their first assessment of the European Summit had been correct - little had actually been achieved.
As dawn hit New York, traders saw markets in Europe under real pressure. Most had given back all of Friday’s gains. Both Moody’s and S&P said they intended to review the banks and the sovereigns. Both suggested rather strongly that the Summit had achieved little - if anything.
U.S. stocks took the hint and opened down 135 points. The bulls tried to quickly circle the wagons but couldn’t get organized. Prices continued to move lower into late morning. Then the third shoe dropped.
Around 11:30, Fitch ratings issued a comment on the Summit. It began like this:
Fitch Ratings-London-12 December 2011: Fitch Ratings says after the latest EU crisis meeting it is clear that politicians are responding to the eurozone sovereign debt crisis through incremental improvements. It seems that a "comprehensive solution" to the current crisis is not on offer.
This Summit demonstrated strong political support for the euro, and that its members are putting in place the institutional and policy framework for a more viable eurozone and ultimately greater fiscal union. But taking the gradualist approach imposes additional economic and financial costs compared with an immediate comprehensive solution. It means the crisis will continue at varying levels of intensity throughout 2012 and probably beyond, until the region is able to sustain broad economic recovery.
In the short term we predict a significant economic downturn across the region. The eurozone faces intense market pressure, which is triggering loss of business and consumer confidence, and weak industrial activity and retail sales. Our forecast of 0.4% eurozone GDP growth next year and 1.2% in 2013 would be significantly higher if there was a comprehensive solution to the crisis. The lack of a comprehensive solution has increased short-term pressure on eurozone sovereign credit profiles and ratings.
That diplomatically stated” thumbs down” for the Summit seemed to spook the few buyers who were left. Prices hit an air pocket and moved sharply lower over the next 15 minutes. The Dow Jones Industrials hit their 200 day moving average (circa 11943) and seemed to hold.
The same thing happened in the S&P but in this case it was the 50 DMA (circa 1222). The selling actually dried up at 1227 (see yesterday’s napkins).
While they held, there was no reversal rally. Instead they churned choppily sideways into the final hour. Around noon, several pundits tried to attribute the selloff to the downbeat Intel report pre-opening. That prompted me to shoot out the following email to some trading friends.
This is still 90% Europe. Exacerbated by Fitch comments. Downbeat Intel adds to last weeks DuPont.
Best for bulls if they can manage to close above Thursday lows.
Run rate looks for under 800 million final so far.
Around 1:15,a buzz swept the floor as the Dow ran a single headline that said something like: Israel to Iran: You must choose between a bomb and your survival. Strangely, the market didn’t flinch and quickly the headline became an afterthought.
Around 3:15, after testing the day’s lows for the fifth time, stocks began to rally. Actually, they began to float up. Traders suspected the move may have had a large dollop of short covering. Thinking was, that with European markets having closed right on the lows, some upbeat comments would be due from European leadership.
Having been down nearly 245 points at the lows, they closed off 163 on 758 million shares. There was also evidence of program trading since the Dow and Nasdaq each closed down exactly 1.3%. The S&P was close at 1.5%.
- 8910 reads
- Printer-friendly version
- Send to friend
- advertisements -


Evidence of program trading.
laf
The comment about a rally bc Europe closed at the lows cracks me up.
Full retard market conditions verified. DOW +100 on retail sales faceplant.
Buckle hockey helmet, and get in there and trade with those machines!
Ah, the Americans finally woke up. Was wondering where all the new hopium came from.
I love the smell of bs fraud in the morning. Time for the 'market' to get its fix from Pimp Bernanke.
Nothing bad that a little rumour of QEn cannot fix! You have to respect this resilient, free, competition promoting market which needs no support.
Better illustration of the insanity is Retail Sales come in below estimates yet, German servey of consumer confidence (a made up number) is up so they ignore the concrete news on sales (in an economy wherein 70% of GDP is consumer based) and run the market up on a fabrictaed report about Germany. I think this fucking clown show has reached a level where nothing these gangsters do makes sense.
Of course it makes sense. Think of all the lazy 401k 'investors' you know that can't be bothered to investigate their own investments, but rely of the sound bites at the end of the day telling them 'all is well' and making your knowledge of the 'truth' sound like chicken little returned.
It all has a purpose. Keep the stupid 401k folks occupied while the gangsters raid the vault and hop the train out of town.
EUR shorts must be damn brave with Banana Ben on deck.
Either that or fucking nuts.
Odd market...VIX way down today so no fear? Even on down days very low volume.
Sellers remain cautious since everyone assumes that the big boys will orchestrate the Santa rally. The miss on retail sales is big, and if you adjust for increase in sub-prime credit card and auto loans it would be horrendous.
Well, at least Art didn't try to give us one of his fairy tales of history today. I think he's ok when he stays with what he knows, but I'll be damned if he's got any history books at home. It seems like he uses the History Channel for that information.
He kind of reminds me of the character who plays Jerry Seinfeld's dad, on Seinfeld.
If I could give you +100, I would.
This must be the theme for today. Austerity budgets are an admission of reality. The intention is good, but the flesh is week. When government announces these things, it's like a drug addict promising to turn over a new leaf and start clean. It doesn't last long. When the chills and shakes set in, the vomiting and delirium follow shortly after.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
europe is the perfect wall of worry to climb, but Art's right what happens when you don't have (the abscence or relief from) negative news to juice the market higher. it trades on fundamentals? hardy har har
What a load of bullshit this commentary by Art Cashin... Who cares what all these bloody 'experts' have to say about what is driving the market? As if they knew anything...
After the economic collapse, we might all have to become starving artists to make enough money to pay the bills.