Lots Of Political Risk

Lots of political risk in the markets this June.  Whether enough for a continued swoon, we'll see.

The G7 held an emergency conference call today to discuss Europe's worsening sovereign-debt crisis. Futures were frenetic overnight and are now flat as Japanese Finance Minister Azumi announced "they did not discuss Greece leaving the Euro."  If true, this simply means, like typical bureaucrats, they have not looked at all the possible outcomes.

The G7 call precedes the G20 summit in Los Cabos, Mexico, June 18-19, which if I'm not mistaken, sounds very close the the Supreme Court Decision on ObamaCare.

Hopes were high that the G7 talks would signal that the European Central Bank would opt for some form of further monetary stimulus when it meets on Wednesday.  The way the Euro traded last night, I wouldn't count on it.  And keep in mind that after so much failed stimulus on both sides of the Atlantic, there will come a time when the announcement of more stimulus will spook rather than spike the markets.

Markets are also awaiting testimony by U.S. Federal Reserve Chairman Ben Bernanke on Thursday for any hints that Friday's weak U.S. jobs data could prompt a further bout of quantitative easing.   I'm even hearing chatter of GQE -- global quantitative easing coordinated among the world's central banks.  Let's face it, these monetarist clowns need as much practice as they can get if they ever want to ram through George Soros' dream of a world central bank.  If anyone thinks The Alchemy Of Finance was about finance, read it again.

I'll be keeping it simple.  The nearest 38% Fib level is 1283.20 on the S&P cash.  It stalled twice yesterday afternoon without reaching it.  If this level cannot be reclaimed, we can expect a possible wash 'n' rinse down to the 1254-1259 zone that I mentioned yesterday on Twitter.  I'll be looking for longs down there against my remaining SH position.