The Wrap 5/10/10

{+++}So the market bounced today, so what, the volume on the recovery was anemic in many names. I posted last nights piece at around 8Pm, I actually worked on it and completed it around 3PM. I meant to publish it early for you guys,  but I forgot to hit send, thought I did. By the time I posted last night’s piece, I knew that futures were flying, not as much as at the open, but doing really well. My point is, I didn’t make any changes. I said on the video that everything depended on Greece and Europe. The IMF and the ECB stepped up and did what they had too. The market might have crashed if they didn’t.

Is the contagion over? Maybe. I’m watching terminally wrong pundits speak on Kudlow as I write  as they get dragged out one by one. Why? Hey, the market was up. All clear, all is right with the world, buy with both hands (extreme sarcasm for you new subscribers)sometimes my thoughts require subtitles.

This market has CHANGED its personality, that should lead to volatility and choppiness.. It may resume higher, it may go for a couple of days, it may rollover and die again.  Personally, I think what happened in Europe this weekend is a band aid on cancer, temporary, before the Euro drops further in the weeks and months ahead. Guess what? Greek debt will still rise to 150% of their GDP (from 110% currently) and some smart money still thinks Athens will default. The bailout also did nothing for Spain’s +20% unemployment rate and a dying housing market. Don’t get me started on Portugal and Italy, although their debt levels aren’t as bad.

For now though, the immediate pressure is certainly off Europe, no doubt. Contagion fears are probbaly off the table for now too, although it wasn’t on Friday night, CDS spreads and bond rates have come down also. I still think that our greenback is trending higher and the easy money that has been made in some commodities and materials will be harder to come by. I like oil, especially OXY.

Governments, whether you like it or not, always come to the aid of nations when they are at deaths door. It has happened many times in our history and it will happen again. It’s just the way it goes. Bottom line, bailing out Socialism, which is a flawed economic model, doesn’t work. Time will tell.

Opinions are like navels, everyone has one, and in the coming weeks the conversation will change from what may have happened to what will happen, both in Europe and here in the U.S.

I’d like to welcome all new subscribers and please feel free to check out the chatroom during trading hours. We have had quite a run here and I plan on doing my best to keep it going, however’ my blog is not an ATM machine ( I won’t spit out names just for the sake of doing so) and when the market is in a weird place, as it has been recently, recommendations will be scarce. I hope you all appreciate that. We move when we feel we have an edge and have the wind at our back. Most importantly we wait for setups and a trend to reemerge, and right now we’re not close.

Bottom line, if you put a gun to my head we go higher, but just watch the Euro, it’s back to where it was last week. Weird……….. and I do believe materials may have come down enough, but I expect massive chop in the weeks ahead. Many pontificate, few have a clue how to make money in the market, so try and block out the noise.. I’m looking forward to the future.

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