 | Did the first six months of 2012 actually happen?
After Friday’s 2.5% drop in the S&P 500, its largest single down day in seven months, the market’s 2012 gains have all but been wiped out. The Dow is now down YTD. Accompanying the decline was a flight to quality as Gold's 4% gain is the biggest day since January 2009 and Treasury yields plunged to new all-time record lows with the 30-year bond yields down at 2.5%.
The catalyst of course was the pathetic 69,000 new jobs created in April, which massively missed the 150,000 estimate and fell well below the 100,000 whisper estimate. Moreover, the prior month’s data was revised much, much lower than originally released.
This horrendous economic data and the accompanying market sell off means that the Fed will have a green light to proceed with new QE if it so chooses at the June 19-20 meeting.
So here we go! We’re on our way to 2008 and 2011 all over again. The European Central Banks have all but thrown up their hands and will shortly turn on the printing presses and now Helicopter-Ben has his reason for intervention.
But once again, nothing will be solved and the market will eventually be valued at true levels. On the horizon, it’s just temporary hopium for the crack pipe so we can continue to pretend that the global economic woes don’t exist.
The QE and money printing keep the addict going. But at some point, we’re going to hit rock bottom because central banks will have dug an inescapable hole. Isn’t doing the same thing and expecting a different result the very definition of insanity? Lather, risnse, repeat.
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 banking mafia.
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 - No “Secret” signals today.
- Algorithm positions (10)
- “Reading the Tape” positions (4)…combined Secret’s, Algo, & “Reading the Tape” total… -0.25
ES 1288.75 / 1276.75
POC... 1277.00
YM 12214 / 12114
NQ 2488.50 / 2460.50
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Keep a civil tongue.