Wednesday, December 21, 2011

Morning Post 12/21/11

Another numerology day and the day that marks the one year countdown to the end of the Mayan Calendar (Mexico Mayan region launches apocalypse countdown). Boy will we be having fun next year on this day and in the months leading up to it. Well, that is if the government has not shut down the internet, and I'm not in the Ft. Benning FEMA camp of course. Heck by that time every BD may have stolen all of our investment funds and there may not be any reason to be here discussing investments anyway.

So why the reason for the big ramp yesterday? Well the EU finally got some much needed funding to assist the liquidity crisis. Will this solve any core or long term issues? Heck no! "Below are select knee jerk responses by Wall Street analysts, which as warned repeatedly, are broadly skeptical for one simple reason: by delaying much needed ECB intervention, which is the only "bazooka" in this case, the solvency crisis in Europe's financial core will continue to escalate until the next time around it will require far greater stop gap measures. Bottom line - this solves nothing." What The Analysts Are Saying - Wall Street's Kneejerk Response To Oversized LTRO | ZeroHedge. Bottom line is print or die and then die because you printed.

You see, "Lastly, as a reminder, European deleveraing needs in the "near-term" are €2.5 trillion, meaning today's LTRO barely covers 20% of total needs, and is even less if some banks indeed foolishly decided to partake in the carry trade". Summary - LTRO Represents 20% Of European Bank Deleveraging Needs | ZeroHedge. So the party yesterday is met with the broad skepticism mentioned above and was celebrating a 20% max solution? As STB likes to ask, seriously? All that move for what?

I suggest you watch this, "video is 15 minutes long and well-worth watching. Platt is not a permabear by any means. He caught the rebound nicely in 2009 but now believes the prudent thing to do is completely avoid risk for the time being as better opportunities will come down the road for those who stay liquid. Mish's Global Economic Trend Analysis: $30 Billion Fund Manager Makes Case for Being Totally on Sidelines in Treasuries and German Bonds.

So who's not taking funds out of the markets? "Worldwide, investors have yanked $34 billion out of equity funds this year and put $75 billion into bonds." No Stocks Under Tree: Investors End Year Fleeing Equities For Bonds - Fast Money - CNBC - CNBC and that should leave you wondering who's playing, right?

I really suggest you read this and all the accompanying links - Constitutional Expert: "President Obama ... Says That He Can Kill [Any American Citizen Without Any Charge and] On His Own Discretion. He Can Jail You Indefinitely On His Own Discretion”

Hey, I guess when you are in another country you can have free speech and not be assured indefinite detention for no cause. Must be nice. Hugo tells it like it is, "“Mr. Obama decided to attack us,” Chávez said. “Now you want to win votes by attacking Venezuela. Don’t be irresponsible. You are a clown, a clown. Leave us in peace … Go after your votes by fulfilling that which you promised your people. Focus on governing your country, which you’ve turned into a disaster,” Chávez said, according to The Guardian. Hugo Chavez: Obama’s a ‘clown’ president - Mackenzie Weinger -

So, my cautionary stance of the last few weeks is paying off. I warned to hold off till opex ended and then was willing to give them till the 23rd and then "all bets are off". That still stands. Duck and cover remains in full force (that is on perpetually right now). The LTRO is a stop gap measure that will temporarily solve liquidity issues which should give the markets some relief. As noted a long time back, measures now no longer generate sustainable ramps, but short bursts that keep the markets propped up.

SPX 60m - It took a long and strong move to drive price back thru 1220 but that was not an issue taking that technical level down. How bout that one day 61% retracement. Nice! Minis last night moved as high as 1249 after an 8 point spike in the 5 hr but that has been taken back to get price back under 1236 resistance. This move does open the door to upside potential in cash today, but the take down is not a positive by any means.You see the minis have fallen from that 1249 level all the way to 1228 at this point. that is a 21 point tumble. Not good. Maybe the markets are on to this LTRO being a bogus non solution and want to take advantage of selling at these higher levels? Note there is a potential SP (Shaky Point) overnight at 1200.

I'm watching the blue wedge here. It plays out when? Right after the first of the year of course. Sets up nicely for a churn from now thru New Years. Then down should be the only way to go and that is a massive hole below.

STB will be out this afternoon traveling to the ATL for Christmas with family, but I will be here Thursday and Friday. As mentioned all next week STB will be on vacation, but still posting and working from the annual trip to Crested Butte.

Remember the Reason for the season!

GL and GB.

“And the Grinch, with his Grinch-feet ice cold in the snow,
stood puzzling and puzzling, how could it be so? It came without ribbons.
It came without tags. It came without packages, boxes or bags.
And he puzzled and puzzled 'till his puzzler was sore.
Then the Grinch thought of something he hadn't before.
What if Christmas, he thought, doesn't come from a store.
What if Christmas, perhaps, means a little bit more.”

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