“News” all around from the markets:
- S&P500 in a bear market and falling.
- Dow Jones at new lows and posting 1% magnitude moves in the span of 10 minutes or less at the moment.
- Gold failing to cross the 50% fib off 1815-1533 (1676).
- Euro being closely correlated with any- and everything major that is liquid and risky.
- HSI is… uh… wow, I didn’t see you all the way down there at 16250. 15 000 gogogo!
Furthermore, the US is trying to spook China with trade war discussions (Chuck Schumer) and the troika postponed the date of further Greek aid. Apparently this date was written in stone just a few days ago, but now Greece will absolutely fulfill its obligations while the people saying this are so uncertain about it that they choose not to hand them the next trance of money… sure, Greece has fudged a few numbers, but it was all to make things look better than they were, not worse! On top of this, it just generally leaves the question of Greek funding up in the air for the rest of October, and if anyone is expecting this to impact their economy positively we need that person shot. This is such a soup that it’s turning farcical, just when we at least could exhale for a moment because Germany ratified the EFSF, everyone goes out and says they’re not willing to back the available safety nets… Wow Europe, a whole new achievement in the “you couldn’t have messed this up more if you tried” category.
Bernanke said he can do something to support the economy. Not what he can, nor that he will. Uh? Honestly, that’s the best you can do? Everyone said Op Twist was a joke, and half of the US political parties are at your throat, and some economists are scratching their heads about whether any central bank can support their economies these days.
In this brave new world, throw your fundamentals out, and some of your technicals as well. Where we are now we really don’t want to be, and uncertainty will be the game to play for at least the rest of October. There are no support lines in sight anymore, and we are just trading off hunches and policy speeches. Yay! At least it appears that we are moving closer and closer to true panic and maybe with luck we can get capitulation this month, but that things had to be this bad before that happened is shocking to me. The HSI P/E analysis, for example, was done with the unstated assumption that we would get capitulation by the 17 000 level, but things may not be so rosy.