 | The NASDAQ rallied Friday despite down days from Apple and Starbucks. Despite what our consumer culture tells us from the ubiquity of iPhones and those coffee cups with the familiar logo, two stocks don’t make an index.
Instead, the NASDAQ and the S&P 500 finished higher on reports of positive corporate earnings (which is seemingly rational), and the likelihood of a Socialist Party victory in France (which is seemingly insane).
The TV talking heads were spinning the story that we may see European economic stabilization because Francois Hollande, the socialist party candidate, is now leading in the French polls.
The last time a socialist was elected president in France was 1981, when Francois Mitterand unseated Valery Giscard-d’Estaing. The French stock market lost 33% of its value within a month of the election and bond yields rose by 250 basis points (from below 14% to about 17%). By 1983, Mitterand was backpedaling on his socialist policies and trying to undo the damage they had inflicted on the French economy.
But history doesn’t matter, because suddenly austerity is “out”, which means that spending is back “in.”
Of course spending requires money and since most of Europe has none, the ECB needs to crank up the printing presses so the French socialists and the other fledgling European regimes can try to spend their way out of not only a recession, but impending governmental collapse.
But we know the fallacy of those policies. Hollande has pledged his allegiance to a “growth compact” in the ECB which means nothing more than the ridiculous notion of forced liquidity.
Bonjour Ben, meet your French friends.
Trade well and follow the trend, not the so-called “experts.” Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters.
larrylevin@tradingadvantage.com
Trading Advantage
(888) 755-3846  |  Larry Levin's Trading Advantage is a leading investment education firm that empowers traders to achieve and surpass their financial goals. More than 50,000 students have used Larry Levin's proven techniques for powerful results. |
Trading Signals from the Electronic (ES) mini-SP 500 - 80% sell @ 9:41am at 1396.25 = +0.75 & +2.00 (2 lots)
- 80% sell @ 9:47am at 1395.75 = b/e & -0.75 (2 lots)
- Algorithm positions (3)
- “Reading the Tape” positions (2)…combined Secret’s, Algo, & “Reading the Tape” total… +5.00
ES 1400.25 / 1395.25
POC... 1398.00
YM 13187 / 13157
NQ 2740.25 / 2725.75
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Keep a civil tongue.