The collision of global markets and social mood

Friday, January 23, 2015

Friday Market Update -- Euro & The Anti-Euro Vote In Greece On Sunday

News:
There is a critical election this Sunday in Greece, and anti-EU party Syriza is projected to win. Syriza leader Alexis Tsipras, it is feared, will not honor commitments to EU bondholders and will take the country out of the euro and back to the drachma. (Instant 70% off for vacations in the Greek Islands.)

The King Is Dead: Saudi King Abdullah has died. But his passing likely means zilch to the price of oil.

R.N. Elliott said with regard to news, "At best, news is the tardy recognition of forces that have already been at work for some time and is startling only to those unaware of the trend."

ES futures:
Reached new highs over night but seem to have double topped. Coming off them modestly.

FX:
It's all about the euro now.




Too many bears, not enough bulls. People seeing disaster while I see what could be the end of a five-wave sequence down. I'm bullish here for a multi-week trade.

Long term, yes, I think the euro is toast. It's a creation by globalists. I want it to fail, along with the rest of their sick plans.

But just as oil is causing fund blow ups and company defaults, be mindful that the euro could inflict even more pain.

Bonds:
Still seeing crazy amounts of volume in 10-year notes overnight. I don't think it's good. This chart of yields on 5s, 10s, and 30s back to 2009 may suggest why:


5s are rising vs. longer-dated 10s and 30s. If this keeps up, someone in the bond market will get spooked, and the Fed cannot afford to lose the long end of the bond market. I think the US dollar is sniffing this out and is telegraphing rising rates many months out.

I've heard too many people say how great it is for the dollar to be rallying. I love it too. But financial markets world-wide are not prepared for it. Somewhere in Basel, Switzerland, you can bet that deep within the bowels of the BIS (Bank For International Settlements), the central bank of central banks, people are flipping out.

Energy:
Wondering now if the surge in crude oil open interest means an increase in shorts at the end of the trend which will soon power a violent reversal.

Note the open interest of natural gas is falling as it declines. Therefore, I could see a turn in NG before CL. But oil will likely be the bigger headline.

Yesterday looked great for a reversal in oil, but it failed. Watching today carefully.

Metals:
Gold continues to take a breather. Sentiment is high.

S&P outlook:
We got the rally to the 2060 area. If there is some backing and filling it would not surprise me. But I will be looking for either corrective or impulsive structure to tell what could be the market's next step. Anything below 2042.88 would suggest to me that the market has issues.





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