As the World Burns
While many of us on Thursday paused to give thanks for our friends, family and all that is good in our lives, others decide to pull knives and guns on other shoppers and trample their fellow Amerikans in a desperate bid to save a couple bucks.
And that’s supposed to be a good sign for our economy?
Initial reports suggest strong turnout by buyers, however that’s not always a good thing. Great article by the WSJ here – Early Holiday Sales Pay Off, for Now http://on.wsj.com/QjSzAZ
It’s still November and we have a long way to go until the closing bell sounds on the holiday season.
Retail Stocks Struggle on ‘Cyber Monday’ http://on.wsj.com/RcGr6n
As I stated in several live trading events last week, a rally in a holiday shortened week and on light volume is not to be believed. It is to be sold into.
Financial pundits far and wide along with the financial media searched for a reason the market rallied last week and they arrived at a most absurd reason – fiscal cliff resolution.
Apparently they watched different news conferences than I or are simply continuing to fail at their jobs of reporting the facts or providing accurate commentary. Or they simply are forgetting ‘Washington Speak’ – its own language where what is said is not what’s meant.
The heads of the 3 families – Obama, Reid, and Boehner – said that talks were “constructive”. Allow me to translate. This means that instead of talking over each other from blocks away we got in the same room and pretended to talk and then listen to each other. We may have looked like we were listening, but we were actually wondering what time our flights home were and what was for lunch.
There was no ‘resolution’. Not even close. Apparently the market forgot how contentious the last debt ceiling debacle was and what it did to the market. The VIX went from its current slumber to well over 40 in a few short weeks.
‘Fear’ Gauge Showing Little of It http://on.wsj.com/RbSNLX
Oh, and some other minor annoyances were also occurring last week and are certain to impact the market, when the market realizes how bad they are.
Israel stopped short of open war with Hamas. The only reason they did not initiate a ground war was because their Iron Dome anti-missile defense system worked as advertised with over an 80% knockdown rate. But to think Hamas will not get newer weapons from Daddy Iran that will circumvent Iron Dome is foolish. Anyone remember ‘Spy vs. Spy’ in Mad Magazine? Hamas is simply rearming, and arms are inbound once again from Iran. And after tugging on Superman’s cape and living once again Hamas has grown in stature.
Morsi decided to make Mubarak look like a nice guy by claiming sweeping powers for himself and minimizing the judiciary in Egypt. Good times. The former head of the muslim brotherhood is on his way to causing another revolution in the embattled country. As I’ve said many times before to TGO and WCI traders and investors sometimes the devil you know is better than the devil you don’t.
European and IMF leaders are set to continue meeting today to talk about – shocker – Greece. Maybe this time they’ll figure something out. Sold. And Catalonia decided they had enough of financing the rest of Spain.
Operationally we have some Fed heavies speaking this week in addition to a slew of economic reports. Durable goods, housing, GDP, personal spending and personal income are all on the short range radar and have the potential to move the market.
The market regained much of the Obama sell off last week but that does mean it’s time to raise the rally flag this week. At Top Gun Options and Wealth Creation Investing our strategic mindset remains bearish through December where we will begin to get bullish. More to come on when we plan on making the strategic shift and how. For this week we will continue to manage our bearish positions and hedges as we look for the market to wake up and get back to viewing bad news as just that.