Tuesday, September 14, 2010

Open Fire

Today is one of those days when you really don’t know what to do, but you have a twitchy trigger finger and things are getting nervous. So far the run up in equities has occurred nicely, we have had a turn in USTs and the Euro has indeed been a false start sell off, correcting back up leaving us room to reconsider the opportunity to sell it. But today just feels a bit more "iffy". Whether that is biased by sitting in London, listening to the radio and wondering if you are back in the 1970's with the TUC threatening coordinated protests and action against the cuts. Or if it’s the Telegraph article about the doom coming, we don’t know, but the press is sounding more like the Kaiser Chiefs everyday.

Or if it's hearing about the ongoing grief in Greece that the world apppears to have forgotten. Our interest in Greece has of course been provoked having witnessed first hand the extraordinary pricing of nearly everything out there this summer. October's Vanity Fair is carrying a great article on how the crisis evolved and the mind set that prevails and is well worth a read. Some of the figures quoted are staggering. The BBC also ran a piece last night on how the populace is trying to fight back. The most facinating way of protesting they have developed is militant shopping. You go as a crowd into a supermarket, fill your baskets, all arrive at the check out and then all demand a discount causing chaos. TMM so wants to try that in some UK establishments, but unfortunately most of the complete rip offs are occuring in the monopolistic service industries you can't avoid and they know it. UK RPI printing today at 4.7%? PLEASE show us the deflation this summer's markets were so discounting...

It may just be a sanguine post holiday gloom. But whatever is affecting TMM's pschye is making them wonder if its time to open fire on the bulls. But it’s not clear. Ideally we would see a break of the recent SPX highs in the 1130 region to see a renewed wave of buying come in for one last hurrah, as it still generally feels that there aren't many people on board this equity run and denial is rife. But there are some technicals mounting that need to be overcome. There are a raft of soothsayer indicators suggesting turns in FTSE, HSI, DAX and Copper and there is one coming up in SPX tomorrow. Add to that a mood shift following a good rally, the onward approach of our end of Sep "it all falls over again" date, the softness in Germany's data and, despite the ideal of seeing one more big up-splurge, we are going to make a call that those are definitely white socks and let loose the first volley into the oncoming equity bulls and also restart the euro selling.

"Let em have it lads... Sell!"

6 comments:

Nic said...

I agree, we are almost there, not sure this is the big short though.

Sentiment seems to have got a bit extreme for the EUR and the USD considering the levels we are at

Nic said...

Goldman says Fed will make 1 trillion more asset purchases this autumn. QE forever ....
http://blogs.wsj.com/economics/2010/09/14/goldman-fed-may-announce-new-asset-buys-in-november/#

FX said...

One of the beautiful things in life is Optimal illusion,our socialist jockey is now in the straight,though, like your research agrees,best to allow for it to balance up and find its stride to see if it has anything to give,but,always watch the competitors around you, as our horse may be striding clear of the field it can be an illusion to how fast(strength) its going due to the rest of the field actually capitualating more the normal or this race may provide the form race of the year!,but obviously every race is different, most notably this one!.Which should make this race even more interesting.

ps. I really hope you had to dig out that music/video clip, for your sake.

debbie said...

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Deniz said...

extreme sport - fx devaluation- at its best today - jpy, krw, sgd, brl, cop to name few. so where do we end up with all this?

Jeffrey D. Benson said...

I'm ready to short the hell out of the S&P 500. My fear though is the fed. We just keep deferring to fiscal crisis, currency crisis, dollar printing press. My macro thesis is falling real estate prices. Look at Robert Shiller's 100 year analysis of housing prices. We are still a 33% decline away from long term historical trends. The securitized loan market is still dead. How can Americans finance consumption (in the short term) if we have 10% unemployment and a fall in home prices. Long term, I'm with buffet. The long term projection of the u.s. Since it's inception is exponentially upward. The rail road, the auto, the television, the railroad, the light bulb, the telephone, the computer, the Internet, etc. I hope there is new innovation that brings us out of this....something more interesting than real estate for god's sake. Nanotechnology, true progress in genetic engineering, mass non fossil fuel energy production (photovoltaic in my opinion), or perhaps some major development in information technology that makes production, manufacturing, or construction seamless. But until then how could we not fall, from withdrawal of fiscal drugging at the minimum.