The collision of global markets and social mood

Wednesday, May 29, 2013

Too Honest For The Market

So 10's and 30's were having a rough time yesterday, nearing multi-week swing points to the downside, and the SPY, IYG, JNK, HYG chart looked terrible, and along came Bank of Japan Governor Haruhiko Kuroda last night who said that no financial system was immune to a possible crisis, and that the global economy hasn’t yet completely shaken off the effects of the global financial crisis.

He's 100% right, but maybe he's too honest for the markets which have been conditioned to believe that everything is fine.

The yen liked it, meaning it got stronger. And S&P futures sold off. And then Germany's inflation rate jumped, and now Europe is a blood bath today. Interesting night.

I'm not seeing the kind of carnage, so far, that would lead me to believe that the bottom was about to fall out. The S&P still looks like it's setting up another triangle. And yes, it could fail and completely fool me. But I still doubt it.

Yesterday's decline from the 1674.21 high was sloppy. So was the late day bounce. I do have a 1:1 Fib extension target at 1622.56, but unless the 1640s break down, the triangle could win.

Upper targets, should the triangle prevail, are roughly 1694, 1730, and 1778.

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