Bulls on Parade….

Posted on 07/31/2011

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……but for how long?

Rally round the family (Speaker of the House and Majority Whip)

With a pocket full of shells! (and about 218 votes)

The S&P futures dropped back to 1285 late Friday with pervasive uncertainty over the debt situation (unfortunately we didn’t have the chance to get long again @ 1283 and risk new lows). I think we’re likely to see a short term (2-3 day, possibly week-long) bender/rally. That binge will end like all others – with an excruciating hangover where we’re forced to come to grips with (reality) the fact that the economy is still on life support at which point equities may break the 200 day support and plumb 1250 in short order.

No new trade ideas until we get more clarity, but watch out for whipsaw moves (not unlike the first effort to pass TARP in late 08), or as Mike McDermott (Matt Damon’s character) said in Rounders, “you can’t lose what you don’t put in the middle…..”.

Short story, I expect Boehner/Cantor to round up just enough votes to get this done tomorrow. If they don’t – look out because this will move from a politically manufactured issue into a crisis of confidence.

For the better part of the past 2 1/2 years we’ve had greed driven markets, but the cards can be turned over in SHORT order and move into a fear dominated (sloppy) market. Big picture – ABSOLUTELY NOTHING has changed. Accomodative monetary policy, Europe in tatters, and a stagnant domestic employment situation.

Finally, something interesting I read over the weekend that I find tangentially related to this debt circus:

“Failure is an opportunity. If you blame others, there is no end to blame, Fulfill your obligations, correct your mistakes. Do what you need to do and step away. Demand nothing and give all. Demand nothing and give all.” 

Derivation from:

~Tao Te Ching

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Posted in: Politics