All the noise for less than three points? Definitely not worth it. If you jumped on the short side during the day, you must be very disappointed today. May be one more attempt to the downside will be made tomorrow. But so far 1300 level have held throughout the week and depending up what happens tomorrow, I think we have a tradable base for the next patriotic rally. I better give a nice name to the coming rip. How about “Fast and Furious”? Congress and Holders both should be happy.
What caused today’s massive “U” turn, only the manipulators know. Rumour is, someone purchased $ 3 billion worth of emini contracts and that caused the stampede. Whatever it is, it is not a definite trend. Just stupid gyration of momentum chasing bots. And while we will get another rip soon, selling is by no means over. I keep writing, there is no panic in the market and as such no bottom yet. May be the bottom will come around 1230 or so and it will come by end of July.
Whatever it is, this guy cannot stop smiling today. Although the Court said the Obamacare is a tax on American people but the congress has constitutional right to tax Americans. It was a funny kind of day when FIX news and largely irrelevant CNN came out shouting that Obamacare has been repelled by US Supreme Court and then the stock market revert back up on some other rumour. But Gold and crude did not recover much. Crude is over sold by a mile and is due for a bounce. May be it will bounce along with the equities next week.
The real news was that Barclays Bank has been caught with its hand in the cookie jar. The fine it has been asked to pay, $ 450 million + is just a slap on the wrist and is nothing compared to the tsunami of legal challenges facing it. I think it will have to make provisions for billions of dollars of legal settlements. Who might be the losers in this rigging? One group that comes to mind are the investors who purchased short term bonds from the banks linked to LIBOR rate. The name of the guy looking over it is Bob Diamond. Kind of rimes with Dimon, whose bank now appears to be sitting over a loss of over $ 5 billion. And when they are caught red handed in wrong doing, they blame the small fishes in the food chain. The boss gives tacit approval for the wrong and illegal acts and collects millions of dollars of bonuses. Just what Barclays did between 2005 and 2009. And it is not just Barclays, HSBC, RBC, CITI, UBS and many others are involved. Is it any wonder that the Bankers are vilified and called Banksters? There is “Systemic Dishonesty” in everything that these TBTF Banks do. But nothing will happen to the big bosses. Didn’t we just see that during the Senate hearing of Jamie Dimon?
Tomorrow there will be photo-ops from the Euro leaders and some sort of statement. While for the sake of market, I think they say something soothing, personally I hope Germany tells them all to drop dead. Now the Euro cup final will be played between Spain and Italy. This is what is called “Battle of two losers”. ECB must be very proud that both its sponsored countries have made it to final.
Anyway, the last day of June is mostly bearish. Dow down 15 of the last 20 and Nasdaq down 6 straight. I think it will be down day tomorrow and that fits well with the pattern of 2011. Last July there were 5 red days before it made the final top. So far we have 4 red days. So one more red day is in order. Tomorrow will tell the story.
That’s it for today. Thanks for reading http://bbfinance.blogspot.com/ . Please join me in Twitter (@BBFinanceblog) and do re-tweet the post if you agree with it.