The collision of global markets and social mood

Monday, November 2, 2015

Monday -- China, ECB, Bunds & BS

S&P E-mini Futures:
Recovering from an overnight dip.

Over the weekend, the FT reported "China aids eurozone QE drive with sales of German bonds."

Felt like propaganda to me with its convenient motive (China?) and reminded me of the summer of 2007 when Bear Stearns quietly bailed out its "High-Grade Structured Credit Fund" and began negotiating with other banks for loans against collateral for its "High-Grade Structured Credit Enhanced Leveraged Fund."

It started small and quiet and eventually, after all the BS, ended with a bang: the complete collapse of Bear Sterns.

In the wake of the FT article, German Bunds have failed to trade higher on further dovish talk from the ECB and instead traded lower. It may be a tiny thing now, but worth keeping an eye on.

Meanwhile, Asia had a red night while Europe is green thus far, possibly as the ECB's Nowotny added to Draghi's comments that EU's slowdown is probably not temporary (QE forever?) and said that the central bank "has to act" given that inflation target is being missed.

Elsewhere, in Bel Air, there's yet another boom going on.

Good to know.

Surprising to see EUR higher on Draghi & Nowotny's comments, which may show that traders are more concerned with Bunds action that ECB talking head action.

As if sensing Bund blood in the water, US treasuries are lower too.

WTI crude currently off 1% and NG getting slammed 3%.

Gold, silver, and copper each down with silver the relative strength loser.

S&P Outlook:
Still thinking 2063.11 is the key to near term price action. Keeping it simple.

Price may have created a 3-wave corrective pattern from Friday's new rally high which suggests higher unless 2063.11 fails.

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