Citi's
Chief Economist, Willem Buiter, said this morning on Bloomberg TV that,
"time is running out fast." He said further: " I think we have maybe a few months -- it could be weeks, it could be days
-- before there is a material risk of a fundamentally unnecessary default by a
country like Spain or Italy which would be a financial catastrophe dragging the
European banking system and North America with it. So they have
to act now." Read the full article at:
http://www.zerohedge.com/news/willem-buiter-spanish-or-italian-default-could-happen-few-short-days
Yesterday’s
WSJ headline was “Turmoil Spreads in Europe” and that may have had more to do
with yesterday’s selloff than anything else.
Bond yields rose for many of the non-crisis countries. That coupled with a report Tuesday that
Europe grew little if at all last quarter means Europe is probably headed into
recession. All of this adds more worries
to an already troubled Europe and threatens the US recovery.
Today’s
volume was 76% of the 1 Nov volume (when we had a short-term bottom of 1218)
and market internals improved too over the 1 Nov data. So today might be considered a successful test
of the prior low, but this sort of analysis is a bit questionable for small
downturns; none-the-less, I think we go up tomorrow based on market technicals. If
not, tomorrow could be very ugly because we broke the lower trend line today. Unfortunately, the market is reacting to news. When a market becomes news driven, technicals
don’t mean much.
The
NTSM analysis remains HOLD today.
I
bought back into the stock market at S&P 500, 1155 on 7 Oct after the 6 Oct
NTSM buy signal. I remain 100% long in
the long term portfolio (100% stocks in the 401k.). (See the page “How to Use
the NTSM System” – the link is on the right side of this page).
I
am 90% long in the trading portfolio. I
am probably over-committed (maybe I should be committed) considering all the
bad news out there.
