Monday, December 12, 2011

Morning Post 12/12/11. SPX

OK, I was thinking that with Christmas and all we'd lighten up on the doom and gloom for a couple of weeks. Sorry, can't do that. Now is the time for light hearts and giving and all the mumbo jumbo that comes with this glorious season, but now is also not the time to be lightening your focus on global events financial or otherwise. We're on the cliff of despair and now is not the time to be distracted no matter the season. Sure, they may maintain this market thru Christmas, but in January all bets are off.

STB remains on the liquidity issue train. Follow the money (or lack there of) and you will find the source of all the ills. For those of you that need an analogy, the global financial system is a huge cash burning furnace. They print money to fuel the furnace. Money gets burned in the furnace. In a normal situation  this furnace would generate steam or some form of beneficial energy that propels the engines. Sadly in this case the money is being burned to just sustain the life of the system and is not generating any benefits beyond that.

Here is the key - we have to pay for every dollar burned/borrowed. When the system can take that energy and use it for growth and actually return more than the fuel everything works (and as we all know a perpetual energy system has not been discovered yet - helloooo). When the system is just burning dollars to sustain, things are not so good. So, we've been shoveling larger and larger amounts of dollars that we still have to pay for into a furnace with an ever growing appetite that generates nothing in return. And that the state of the global financial system Charlie Brown.

Now we also have to start focusing on gold. Desperate times require even more desperate measures. The search for cash/liquidity is expanding into some very dangerous places. “Gold market people say European commercial banks are being driven to lend gold for dollars at negative interest rates just to raise some extra cash for a few weeks. There’s not a lot of transparency about where the banks are getting the gold they are lending out, but it could be lent to them by either their national central banks, or by gold exchange traded funds.” ETF And Central Bank Gold Lent To Banks Being Relent Into Market? | ZeroHedge.

Lots more detail on this and the markets to come in the AD and the rest of the week

Global tensions get very strained when finances go awry. I think we all know that the market's goose/turkey is already overdone and when we finally cut into it then it will resemble the overdone dried out mess that was on the table in Christmas Vacation. I think we need to be focusing one the potential of war (WWIII). ""Soon we will hold a military manoeuvre on how to close the Strait of Hormuz. If the world wants to make the region insecure, we will make the world insecure." "Iran Military Practicing Straits Of Hormuz Closure | ZeroHedge.

SPX Daily - Consolidating inside blue triangle inside black wedge.

SPX 60m -

Minis 1m - 1236 support. Not good. EU summit disappoints. Friday's ramp was complete bullshit. Reality sets in. Nothing has changed. No issues have been resolved. There is nothing they can do but bullshit you at this point before the system collapses. As for the "Christmas Rally", who knows? Markets are so rigged that they could start spinning rumors at any moment they desire. I remain on the sidelines with ST stuff and am considering adding to my long term weighting in SH here or soon.

Remember the Reason for the season.

GL and GB.

"Oh, for the good old days when people would stop Christmas shopping when they ran out of money."  ~Author Unknown 

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