Point Of Recognition Or Healthy Retest

Europe tried to kick the can down the road but the market is not buying it. Solving a debt crisis with more debt does not work. The question is when the market notices this. The US did the same thing nearly 18 months ago and the market has still not called out the US. Is this a healthy retest of last weeks low or is the end game here? I believe the market will bounce  but am less sure when the market will choke on the mountain of debt. Have a great weekend.

3 comments:

CP said...

More put buying than yesterday. I'm covering some shorts here.

PJ said...

If a trillion dollar bailout buys the markets a week, we're at the end of the line for bailout magic.

The bear market has already resumed. Any bounces will be brief. I don't think it makes sense any more to play for them.

Businesspeople are realizing that the economy has turned down again. The decline in consumer spending is going to accelerate as the stock market falls. It will take another month or two to see it clearly in government economic data, but it's clear to corporate executives in real-time.

That means too many people getting out. We're going to see a rush for the exits before long.

Anonymous said...

Chart of S&P.

The market is following exactly, the last 3 corrections.
The end of Sept 09, Oct 09 and Jan 10.
The initial move lower, followed by a bounce higher then another move lower and finally the big push higher.

It looks like we could hit 1073 by the end of this month. Followed by a decent move higher.

good luck