triplesvopen26 Mar 2010 09:19
The saturated coverage on Greece and the Euro is swamping the more meaningful indicators of abnornal currercny movements, and the two great pincer movements waiting to launch themsleves - US unemployment, and US housing delinquencies. Offsetting this is the zero-interest capacitance of easy money that is inflating stock markets. The FEd have boxed themselves in. Easy money has found its way into the stock market. We needed more time to heal the economy, bot boost it with steroids. I am reminded on the Asian financial mess we had about a decade ago where cheap loans led to exacerbated and reckless spending. The bubble is here in the west, not the east. Something has to pop, you would think. The only alternative is the slow release of liquidity from the system, which means slower growth, so we will have to adjust. Absent the period trauma of Dubai default threats, we must be looking at some sectors being trummeled in a rotating fashion. You get the miners hammered one time, then the financials, then the banks, then media or retail, then property etc... So long as these events do not arise simultaneously in a broader market sweep, the excess can be contained. Events like the Dubai default will exacerate matters. But as for seeking something to circle, I recently bought in to Ladbrooks at 147 and sold out for a profit at 154 (day trading). Another company I am watching for odd movement is Aviva, which looks strangely volatile. Some traders are looking for it to fall to say 350 and to buy back in, secure in the fact that any further drop is shortlived wiith fundamentals buoying the stock. If this turns out to be like Barclay's recently hovering in a range 250 - 280, you can make a good trade on this one by day trading. Underpinning all of this is the fact that Bernanke and his peers at the FEd have unnerved me of late with their soundings, and the Gulf Arabs are not sane people in any proper sense, and what they say is seldom causally connected with what they actually do. Finally, I would not be surprised if governments used the easter break to leak news while the markets are closed, and also bear in mind we are closing out the first quarter,and so some make be seeking to unwind their positions and take profits. Have a nice easter break. I am off to Portugal for a week.