The collision of global markets and social mood

Monday, February 25, 2013

The World Is Green

Happened to glance at a chart of the Dow this weekend (which I don't do enough of intraday due to being so S&P focused) and noticed it was fast approaching a 78.6% retracement of the decline from the 1530.94 high. The equivalent on the S&P is the 1524 area.

So I'm not at all surprised to see the futures up big this morning. It's looking dollar related, as the dollar is getting pummeled after its mini breakout a few days ago.

Asia was up big last night, especially the Nikkei. At 11,663 it is closing in fast on 12K which is where I'll look to take profits on my EWJ position.

Europe is up big too. Green is everywhere. One might never know that Moody's downgraded the UK late last Friday. No one cares. It seems the whole world is addicted to any sign that the dollar will continue to weaken. If currency destruction is the chosen end game of the central planners, it means they are going to try to get us to pay their bills. All of us. Everywhere.

Somehow I don't think it will be that simple for the banksters, however.

Nor do I think the S&P is going to be a simple affair. Who knows whether it's gearing up for yet another sideways triangle to new highs (with a few wild swings left), or whether today's rally is just a deep retracement before another sharp decline into the 1475 area. Should a triangle develop, the projection would be first to the 1542-1546.69 area, or possibly 1577.23, a new all-time high.

I will be letting go of some SPY 152 calls at the open and then seeing how things develop later. Puts are cheap and about to get a lot cheaper. They'll be marked down from retail to wholesale prices today.

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