Quote:
Originally Posted by johanness
Predictions for a bad end to Nov still or?
|
Markets at the moment are hovering between 1230-1260, with the lowest record volume in the last 4 months. To get the momentum we need to push higher or chop lower, we're going to need
big news to come out. I don't see any indications of a fully-bullish or fully-bearish nature in this 1230-1260 region we're in. It's more indecisive than it is anything else. Call it the purgatory level while markets anticipate judgement in Europe.
Big news to look for:
- Nov. 23rd, US Super-committee will most likely fall short of their 1.2 trillion budget cut, but will most likely meet half of those targets.
- If Italian yields cross the 7 - 7.25% mark again, expect huge sell-offs like the one we saw last week. Same goes for Spain hitting higher yields, as well as the widening French and German bond yields.
- Funding for the EFSF to increase from $404 Billion Euros to $1.2 Trillion Euros NOT being gathered. BRICS won't lend money. Japan won't lend money. Europe will have to figure out tough ways of raising that money on their own. They won't get it all in one shot, so expect market unrest once Media starts talking about this.
- French or US credit downgrades again. This will shut-up the interbank lending (possibly), or at the very least instill fear of French Contagion. Potentially huge sell-off.
As you can see, what I'm expecting to see happen is unlikely to be resolved by Political will but very likely to occur soon.
At this moment, I'd be big long if SPX breaks 1280+ for a confirmed upward rally. And I'd be heavy short if SPX broke 1220.
Fact of the matter is, you have to weigh your apples and oranges. Some good news came out, but math doesn't lie: Italy cannot pay off it's debts, there just isnt enough money in Europe (without ECB printing money).
Personally, I'm looking for a downward trend, just because Fear is always more motivating than Greed. We're coming off of a month-long October rally but can't seem to hit higher-highs so far. That should tell you something.
Mact, you still here? What's your opinion?