Wednesday, November 24, 2010

BS Rally and Fear Factor 2

Darell has been watching FF2 and pointed out a breakout

From the chart --it appears to breakout upward (less fear).

See my unbiased take on that......

Today rally was complete BS, unless of course the FX markets (huge in comparison) were BS, or the correlation between USD and SPX ceased (not likely).

So the rally today was BS, it was not supported by FX.   It was meant to take bear money and get some retail to pile in bull.   However that said, we could certainly have several days of bull action.


 , turn off the monitors, shut down for a while.   Go hiking, clear your brain. 

Put the mouse down now.


  1. Fundamentals matter. US large cap have done well with earnings this year. 200 plus years of cycles indicate this will be a high growth period even though it is a recession/depression. Right now earnings after cost cuttings are fantastic. Capital can flow into both the USD and the US stock market if it doesn't have better opportunity. Stephen Jen from MS layed out this scenario and expectation in early 2000's. Correlations work until they don't - and then the hedgies get clobbered. As Cara says there is a currency war underway. Euro was/is a political tool, necessarily a global currency. If it goes poof.....where does that capital go? Govt bonds? Not any more. Markets could double or triple if th eEuro and govt debt is shunned. Tricky days......

  2. I do agree that fundamentals matter --- over long time periods.
    2010 looked great compared to 2009, but 2011 is going to have a tough time to beat 2010.

    Great thought though, if the Euro is thrown under the bus (what would that look like) would people in the Euro countries get their own currency back and could turn in their Euro for their own (or someone else's).

    Pressure from upside down housing will continue for many years to come. That has psychological and economic force.

    Appreciate the mind opening comments


Insightful and Useful Comment!