Longs showing not even a hint of anxiety, worry or fear . . .
wow, very short memories . . . I guess everyone that is long SPY believes that nothing can change - quickly and overnight - and that QE will not allow the market to reverse. Perhaps it will put a floor in downside risk, but it hardly means that the market will continue its melt up. At best you can hope for is a sideways market this week. But most of you who trade options will be killed in such a flat market, especially if volatility stays low. You underestimate the ramifications of a disorderly situation in Europe at your peril.
Right now the Euro situation could prove worse than the summer of 2011 - so many central bank bullets have been expended since then and Italy's situation has only gotten worse - remember it was Spain and insignificant Greece (small in comparison to Italy) that created the issues back then. Italy is a gorilla comparatively speaking in a very unstable situation. Cyprus is the banana peel that the gorilla might slip on . . . .
As for futures - perhaps they will not be red . . . watch the Italian bond market that will dictate this week's direction. Better hope the ECB is still willing to help the Italians right now, Monti's provisional continuation is the only thing that may allow that to happen . . .
Really could go either way - but with a downside bias right now IMO . . .
Lets see, AAPL has dropped from $700 to $440 in a few months..... Stock yields more than a 10 year treasury, as 1/3 of the entire market cap sitting in cash.... No debt and a PE multiple of around 10X earnings..... I'm not afraid of buying that......
I give you the cash hoard - but what about growth? You can call Apple's multiple low, but we know why that is occurring - until they do something with the cash to insure growth. How do you reconcile the fact that many a company with big exposure globally are still suffering - no where near pre-crisis levels - GE, X, MT, etc. The list is long and the world has changed.
I'll take that bet . . . in fact, I would have taken that bet based on the Italian situation and Fed meeting this Wednesday . . . this Cyprus situation is only icing on the volatility cake this week. Perma longs are sweating and they should be - the EU just eroded confidence in the entire system . . .
I could care less short or long - its about getting on the right side of the trade . . .