Monday, April 16, 2012

Afternoon Delight 04/16/12 - Near Death Experience

Ok, I'm not sure how to summarize the news and events of the day and what's to come the rest of the week. Let me say that things are not good, and I'm considering the  Duck and Cover call. For those that missed it last time - it has a catchy tune, Bert the turtle and is about par for some government sponsored propaganda but this information is important to all. Remember what to do if you see a bright flash.

Other than Farrakhan Threatens: People Will Kill Their Leaders In A Few Days the news was quite normal. You know, Spain imploding, AAPL's plunge, GOOG dumping, the MSM and markets over hype the positive in C's massive revenue missArgentina Default Risk Surges On YPF Nationalization, CDS Approach 1000 bps, the LTRO2 epic fail and many more newsworthy items hit the boards today. Just your average day on the global financial scene, and the markets reaction to all of that was a ho hum DOW up 71. Amazing resiliency that DOW has.

All the buzz is about the EUR/USD pair and what's keeping that bad boy from falling to parody with the dollar or worse. There are may theories, but when you boil them all down the sole answer is intervention, manipulation and whatever target the BIS wants hit will be hit. You can read EUR Surging As FX Repatriation Rears Its Ugly Head Again | ZeroHedge for one likely opinion, or form your own. Bottom line is the EUR should not be surging under any circumstances (or holding value) as more are illegally printed (or digitized into being), the value must eventually decline.

Trying to decipher currency movements is near impossible given the financial condition of the globe. What's real and what is not is very hard to tell these days. Who needs dollars (or whatever currency) when and how many or why is anyone's guess. Is a bank failing? Is a government failing? Who wants or needs dollar denominated assets and why? I can not answer these questions. The global financial system is swimming in digitized debt. The globe should be swimming in all sorts of money, but it is being held in reserves and is not making it to the streets supplementing the banks balance sheets.

Backing my ToS SPX chart out almost a year and you can see the support diag that price closed on and has tinkered with for the past few days.

The ES is not that pretty a chart, but support is the same diagonal off the November lows and they closed right on it as well. Sorry bout the chart - this is my trading chart - drilled down as you normally see it looks a lot better.

Bottom line is if this support goes the markets should fall hard. There is not telling what the G20, G7 meetings will deliver, Opex is this week, AAPL earnings are early next wee and so id the FOMC meeting. While things look dire the rumors of more easing should be flying. We all know that France, Italy and the IMF need funding desperately, but that begs the question of who is left that is willing to step up to the plate? Folks, this debt thingy has run its course. It is only a matter of time before someone balks, defaults, the system does not bail them out and the dominoes start to fall.

GL and GB!

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