Our friend SteveO over at Hawaii Trading is of the view that the S&P is ready to breakout and move to 1300, 1350 or even higher.
I am struggling to see how this is possible given the situation in Europe and the growing debt problems in Western Democracies.
There is no developed country that I am aware of, that has managed to produce a balanced budget since the Lehman event.
So the sovereign debt crises continues to worsen.
Eventually, the debt will implode, taking banks, governments, and social programs down with it.
It is difficult to imaging growing corporate profits in that kind of environment, and therefore a rising market seems unlikely in the long term.
In the short term, the markets seem headline driven. Perhaps if Merkozy pulls a rabbit out of a hat or uses illusion to make the elephant of debt disappear briefly, we could see the big rally.
But based on the secret indicator, it appears a short term rally is likely.
I am struggling to see how this is possible given the situation in Europe and the growing debt problems in Western Democracies.
There is no developed country that I am aware of, that has managed to produce a balanced budget since the Lehman event.
So the sovereign debt crises continues to worsen.
Eventually, the debt will implode, taking banks, governments, and social programs down with it.
It is difficult to imaging growing corporate profits in that kind of environment, and therefore a rising market seems unlikely in the long term.
In the short term, the markets seem headline driven. Perhaps if Merkozy pulls a rabbit out of a hat or uses illusion to make the elephant of debt disappear briefly, we could see the big rally.
But based on the secret indicator, it appears a short term rally is likely.
Still bullish!
ReplyDeleteBut ready to turn on a silver dollar to bearish!
Well said.
ReplyDelete