hah we ALL knew this was going to happen, yet what was that GARBAGE yesterday? impossibly relentless strength $2.25 straight up on SPY from LOD at lunch on some nonsense out of Italy. yeah, like putting a new PM in is going to make ANY difference whatsoever in collaring their debt. ah mission accomplished though, they got me to sell out of my SPXU .10 cents from the bottom for a huge loss at 345PM yesterday.
this morning's action is exactly why it's insane to buy anything in this market. because everything is artificially pumped and propped... until it's not. you can't even really buy this open down 2% because it SHOULD go down 10% before reversing. but then again you can't short the open down 2% because it almost seems like going green by 2PM is better than a coin flip.
the market is an absolute mess. if Bernanke stayed out of things, let the market correct this summer like it wanted to to SPX 900 then none of this garbage in Europe would impact our markets as much. but now, with everything 30% higher than where it would be without fed intervention, there's no where to go but down.
Short the market and dont use leverage, eventually you will be correct. Too many fires going at once for central bankers to mask forever. The whole system will cave eventually so we can start fresh with a new system absent of the rampent fraud.
I agree, yesterday was insane. I posted something along the same lines a few minutes ago. I'll re-post it below...
Just amazing how 10yr Italian bond yields hit an all time high of 6.8% yesterday, but the market rallied anyway, then it keeps widening to 7% this morning, and the market tanks -2.5% on Italian fears. There is no real difference between 6.8% and 7%, and Italy was done either way. Just gave everyone a great chance to sell yesterday, and I sold half of my equity exposure, too bad I didn't sell it all. And for those options players, the VIX even cooperated by dropping into the 20s so you could buy cheap puts. Fantastic.
Well, if the market doesn't like 7% Italian yields, they aren't going back down meaningfully anytime soon, and are only likely to get worse. This all stems from the unintended consequences of 'the plan' agreed to a couple weeks ago, haircutting Greek debt by 50% with ISDA allowing it not to be counted as a CDS trigger event. Thinking they were avertinging disaster by pushing for a non-trigger, all they have effectively done is made all CDS on European sovereigns worthless, as there is no faith now that they would ever pay out. Thus, all the former holders of European sovereign debt that had hedged themselves with CDS are now effectively un-hedged, because the CDS won't pay out based on the Greek precedent. So they have to sell, and sell they have, as European sovereign yields, especially Italy, have risen almost every single day since they announced the plan, as they have now ostracized all their buyers. It's game over for Europe.