The New Insanity

In the second  half of 2011 we have seen five days where decliners beat advancers by a 30 to 1 margin and we have had four or five days where the market was down 400 points.   This happened four times in 2010 and didn’t happen once five years ago  I guess this is how stocks trade when an entire section of the globe is hanging on a string and could collapse at any given moment.

Europe is rudderless right now. Greece just this morning replaced  Papandreou with Papademos and there isn’t a successor for Berlusconi in Italy yet. Yesterday Merkel threw out a feeler on a new European restructuring which sounded to me like a cross between a three card monty scam and a shell game.  Contagion is ready to spread like the plague (if it hasn’t already) unless this gets fixed yesterday. It’s up to the ECB, and only the ECB, to fix the open gash that is Europe.

We are seeing a bounce this morning in the futures. How long it will last is anyone’s guess. Lately, if headlines out of Europe are neutral (doesn’t even have to be good) the markets gets a bid, if it is negative, the market gets hit with a waffle iron. Any good news should ignite a rally. The problem is, there hasn’t been any good news and I don’t know if there will be over the very short term. The wolves are at the door.

The Big Board started posting the Italian 10 year note yesterday on the floor and the kid at my McDonald’s drive through asked me if I had any good arbitrage thoughts on credit default swaps. Everyone will eventually be on Charlie Rose with an opinion.

Some stocks are hanging in there like $GOOG, but $AAPL is hanging on the 50 day moving average. The latter needs to get back over 410 to start making some noise again.

99% of S&P stocks were down yesterday, so if we rally just grab a pointy dart, because it will be that easy. Stay safe out there, we are still in a big mess.

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