Thursday, September 29, 2011

Price Technicals Still Bad

BaseOp2 has looked at the overall interventionist efforts by central governments to preserve and protect debt as the reason to make the 'buyside' the strategic play. However, the particular technical data mined by QRiskValue is continuing to portray a gloomy price construct where technical stocks seem particularly bloated by a blind faith that they are immune from the money problems of the world. These price technicals are awful and seem to claim a serious downside move will engulf equity markets if any hitch in the broad rescue efforts by the collective world financial players fails to materialize. Even worse, they may be saying a sell off in inevitable regardless of the current efforts to repair economies. The S&P 500 is less worrisome on the downside but only when playing a spread between the NQ 100.

Tuesday, September 27, 2011

Save It All

Equity markets still in a trading range with the path of least resistance on the upside. Europeans keep fumbling with debt issues but slowly seem to be dragging themselves to some kind of solution. Massive liquidity and top tier economic health leaves plenty of room for rallies given the pervasive bearish sentiment held by a large segment of the trading and non trading population.

Forty plus VIX, the great predictor of the last event, illustrates just how bearish the world has become given nearly all volatility currently represents downside bets.

The Fed and Treasury are taking no chances and have played overkill in providing anything stimulating as a prevention against Mr. Downside. Any blip lower in the Dow Jones now is a reason to plead with the rest of the world to keep on rescuing the wounded.

Things are not great out there for the many. Housing is a disaster. Job growth is nowhere in sight and creating jobs is going to be a challenge for years.

Governmental actions to stem financial trouble unfortunately has little to do creating economic growth in the US or anywhere else. Intervention is all about protecting assets. The notion that jobs will come if entities are saved is crap. If job growth happens, great, but these boys could really could care less.

Since the Lehman event, putting out every fire and saving everything but the middle class is the course of action. The best long term upside chance the latter may have is to let some it burn.

Thursday, September 15, 2011

Is It Safe?

Markets are going through another round of ' is it safe?' as action has moved from steep break to sharp rally. European accommodations trying to avoid any chances for a systemic failure along with Fed and Treasury positive pronouncements of their own have helped the upside. Equity inflows have increased again as managers execute requests for more stock. Obama jobs initiative verbage, fat corporate cash reserves, and low values to alternative investments make the path of least resistance to the upside as long as markets are constantly reassured by governments of their willingness to be vigilant in arriving at a debt solution.

If all efforts allow world economies to limp to the next year, it is likely stocks will lead all returns as commodities and fixed income become less desirable. But stocks have to make it through the Fall first.