Wow, it is nice to get into the full blown technical analysis again. The market had an initial spike up and is correcting now. While I look for the market to short-term go lower, I think one more rally is in store before investors should bailout completely. S&P 1364 is the final best target for a wave 2 bounce unfolding in a three wave pattern. The market is in a B wave down with a C wave equal to the first move up in store. A big crash down is likely after that. Interesting timing as the market may rally on the Greek election news next week. As far as the next target for the S&P 500, my initial calculations project it will be a minimum of 19% to the downside. So, if you are conservative, you may not want to wait around for a few points to the upside!
The domino's continue to fall with Cyprus asking for a $5 billion Euro loan from Russia. Why wait to have the IMF approve a loan, when you can go straight to one of the nations with a surplus. I think the request is really interesting. Cyprus also has a better debt to GDP ratio due to a social security surplus of $ 7 billion. The country has a total debt of $17 billion and subtracting the social security surplus drops the total to $10 billion. Who does that sound like? You guessed it, The United States.
Showing posts with label IMF. Show all posts
Showing posts with label IMF. Show all posts
Wednesday, June 13, 2012
Thursday, May 31, 2012
The Rain in Spain
The news releases from the United States were not positive as jobless claims continue to rise along with leading economic indicators and consumer sentiment surveys dropping.
The big news in Europe is Spain’s deputy prime minister Soraya Saenz de Santamaria is flying to Washington to meet with Tim Geithner and IMF director Lagarde. While Largarde has recently taken a harsh stance with troubled Euro countries, the near-term outcome does not look promising for IMF aid very soon. While I expect the IMF will be involved before the Euro crisis is over, the political debate between countries for an increased role in the IMF and world affairs will move to the front and center. Emerging countries appear to have the financial strength versus developed countries to be able to contribute.
While Bank of Italy’s governor Ignazio appear to be stating the obvious that investors now doubting cohesion about European governance and the ability to ensure the survival of the Euro, Italian prime minister Monti warned of a backlash against fiscal and structural discipline.
In Spain, banks are stuck with an estimated $184 billion Euros of bad property debt and the government just provided Bankia another $23 billion and most investors believe the bank is now nationalized. Look for the ECB and Europe’s political leaders to announce or talk about using the European Stability Mechanism (ESM) to provide liquidity to Spanish banks. After all, it is reported that $65 billion of withdrawals have occurred as Spanish citizens start to doubt the banking system.
An update on UUP. Since the low on April 30th, the Dollar bullish fund has gained 5.6% while the S&P 500 has declined by roughly 6%.
The big news in Europe is Spain’s deputy prime minister Soraya Saenz de Santamaria is flying to Washington to meet with Tim Geithner and IMF director Lagarde. While Largarde has recently taken a harsh stance with troubled Euro countries, the near-term outcome does not look promising for IMF aid very soon. While I expect the IMF will be involved before the Euro crisis is over, the political debate between countries for an increased role in the IMF and world affairs will move to the front and center. Emerging countries appear to have the financial strength versus developed countries to be able to contribute.
While Bank of Italy’s governor Ignazio appear to be stating the obvious that investors now doubting cohesion about European governance and the ability to ensure the survival of the Euro, Italian prime minister Monti warned of a backlash against fiscal and structural discipline.
In Spain, banks are stuck with an estimated $184 billion Euros of bad property debt and the government just provided Bankia another $23 billion and most investors believe the bank is now nationalized. Look for the ECB and Europe’s political leaders to announce or talk about using the European Stability Mechanism (ESM) to provide liquidity to Spanish banks. After all, it is reported that $65 billion of withdrawals have occurred as Spanish citizens start to doubt the banking system.
An update on UUP. Since the low on April 30th, the Dollar bullish fund has gained 5.6% while the S&P 500 has declined by roughly 6%.
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