Market looking very weak at this point, have not added any more NE but will keep what I have for now, I have some hedges that are helping me but this is starting to make me pretty nervous.....
If Hollande and Merkel shake hands at dinner tonight, that would be enough to spark more short covering tomorrow.
Euro killed today, so this means somebody is very wrong, either the currency markets or the equity markets...and guess which one is not the smart" money?
I wonder what the real endgame with greece and the euro will be. The greek elections are june 17 and the fed meeting on june 21. It may be all downhill until then with a possible huge rally if there is stimulus from both. If negative on both, down we go. If one but not the other, we probably end up the year at s and p 1200. IMO
Atlanta is a huge foreclosure wasteland, fortunately I have not been an owner...It is not uncommon at all for a well maintained suburban commodity style home to sell less than it value from 10 or more years ago.
A higher end steakhouse that I visit routinely e-mail me $20 off coupons...This never happened prior to 2008...The economy sucks here, but people will take on as much debt as they are extended to keep the dream alive.
Texas Holdem anyone?
BTW, in my little area, the housing market is turning over to a sellers market. Houses are not for sale, homes are being sold over asking price. Last house sold was 4 months ago. The prices are stable to up.
People are still worried, big time.
I'm not convinced you can tell much by today's action.
Low volume on the S&P compared to the 4 big down days that preceeded it. How much was a rally that got a head of steam toward the 2nd half of the day from short covering? How much was just an oversold bounce? Will there be follow thru?
Are we now in a "sell the rallies" phase? The trendline for May is still down.
On the other hand, sometimes sustainable rallies start this way....low volume....people uncertain....and then it gains momentum (and volume) as it continues and people commit to the rally.
My working assumption is that we've had significant institutional selling distribution in May and that bounces of any magnitude will be regarded as opportunities to lighten up and see how Europe and the summer play out.
Within that framework I think we get jerked around by headlines. I could see us rally on a big headline out of Europe addressing the Spain problems. I could see us rally on a QE3 announcement. Bernanke is not going to just sit idly by as the market tanks. Until housing recovers, the stock market is the only place he can attempt to create wealth (however temporary) that he hopes will spill over into the economy. The house of cards is still being built.