It was a pretty tough day in the market as the post vacation, pre-Europe-implosion sell off began in earnest right at the open, and continued for about an hour and a half. Down around 1140 it seems we found some support,and rallied from there. This is our third trip down to that area, where twice before a bunch of buyers took over and bounced up. it is starting to look like that may happen again.
I keep waiting for the 2008 style collapse in oil. The trouble is, it's not happening. In fact, this is holding up better than the stock market. What is worse, this is trading at a huge discount to Brent crude, due to a temporary oversupply of WTI, and a situation that is not likely to last much longer.
I expected gold to be in a trading range for several months. It took only a couple of weeks to test the top of the range, and so far it has failed there, so my call is still intact, if on life support.
Speaking of life support, I thought a day when the yield on the 10 year went below 2 would be a sign of the end times. The end times are here, and Ben Bernanke is the antichrist.
It took a while, but the competing factions of the Fed trying to devalue the dollar, and the collapsing Euro trying to raise the dollar, may be about to resolve themselves, and the Euro is winning. The market struggled with the dollar going sideways, so it's going to choke on a rapidly rising dollar.
This morning I was almost convincedthe market was toast, that we were headed for a drop of epic proportions, but we got another save today. The trouble is, none of the issues have been fixed: Greece, Italy, Spain, Bank of America, et. al., are all still waiting to implode at any second. So don't count on another bounce this time.
I will have the new highs update shortly.
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