If anyone still believes that the stock market is economy or markets are rational and logical reflection of demand and supply or for that matter there is no market manipulation, s/he must be more naïve than me or bats**t crazy or both.
The last few hours of stick-save was just to goose the chart and make sure that SPX 1360 is not taken out, at least not today. But Euro is once again below 1.30. Gold is hanging on for dear life around $ 1600. Crude is on slippery slope.
Now the most popular game in town will be played out with gusto. Every now and then, we will hear deal from Greece and how Europe has been fixed. That will ramp up everything and the BOYZ will sell in the rip. That will be the plan going forward. Any bounce is a sell for quite a while now, at least till next FOMC. In this game of chicken, who do you think will blink 1st? I think it will be team Obama and Bernanke. By the way, there was an interesting article in Yahoo! Finance today as how Obama is not taking any tough line on the Wall St. Crooks. Only, now I cannot find the link.
Yesterday, we decided to add short position on Copper and Crude in our model portfolio. That turned out to be a good move although I was ready for some bounce in crude. Cushing crude inventories rose to 1.21 million barrels last week and they have no place to store any more. Crude closed at $97.25 and waiting to drop around $ 93 soon.
The question now is, Greece stays or goes. The arm twisting is on. http://www.bloomberg.com/news/2012-05-08/greek-leaders-given-bailout-ultimatum-as-syriza-begins-talks.html. I am sure that Greece will go but I am not sure when. The flip side is, if we get any headline of a deal, there will be a bounce. And irony is, If Greece leaves Euro, Euro will jump. Do you remember Mexico default? Possibly not, but after Mexico defaulted, a bull run started in the US Market.
Although I would like a small bounce tomorrow, I am not sure about it. And it does not matter really because the short and intermediate trend is down. We are positioned for the move down and are not really affected by the day to day noise.
I was one of the few who criticized the Groupon IPO and called it a scam. Today after 75% below the IPO price, that call has been vindicated. Another mother of all scam is brewing which is called Facebook. I give this IPO another 6 to 8 months, after which it will trade at less than half of its issue price. But we will save that for another day.
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