Tuesday, April 9, 2013

Momentum Weak and Technicals Setting up

Keep in mind that the last time we are these levels in the S&P the Russell 2000 was up well over 20 points higher and the Nasdaq 100 was also up roughly 40 points higher.
Apparently, just when the risk is among the highest I’ve ever seen, investors have recently lost interest in betting on so-called "black swans” and believe whole heartedly in central bank mania, infallibility and creative destruction abilities.  Clearly single cell organisims (as one of the guys in the above video) are totally bought into that view and ignoring anything else…
“Hedge funds set up to profit from huge market slides are falling out of favor, signaling that investors are increasingly confident leading central banks can avert the kind of meltdown that followed the Lehman Brothers' collapse. 
Investors are pulling out of such "tail risk" funds although economic and geopolitical bolts continue to strike from the blue, be they the messy bailout of Cyprus which has shown how the euro zone crisis can flare up when markets least expect it, or the U.S. stand-off with North Korea. - Reuters
Timing could not be more perfect, all it takes is Japan to feel like they need to make any change to the genie they have let out of the bag to blow everything sky high with non-uranium based nuclear weapons. All its takes is a single new misstep, which will surely be all that should be expected, from the ECB to create massive tail risk…all it will take is one whiff of the incongruities in the US and we have, thank you very much, huge tail risk…

Then we have an absolutely asinine commentary by Hiroshi Watanabe. I you wish to click the title:

WSJ: Watanabe: Too Early to Judge BOJ Easing Steps 
  • Mr. Watanabe called the yen's current level, in the high 90s, "sticky," but said any move above ¥100 to the dollar would be temporary. 
  • "Three digits will not last long," he said.
  • yen's weakening against the dollar over the past few months has caused Japanese manufacturers to reconsider an earlier push to move their operations abroad.
  • As Japanese companies look abroad, he said they would increasingly shift attention toward North America, because of low energy costs from the shale gas revolution and the high cost of shipping goods across the Pacific
Could he be more confused?…Less than a few days is required to assertain the results of BOJ easing:
  • loss of control of and confidence in Japanese financial system
  • beaurocratic fear 
  • loss of credibility
  • loss of buying power
  • loss of savings
  • loss of business confidence
any company trying to run a business with all of this insanely destructive central bank meddling is pulling what hair they have left out and no amount of shale is going to replace the money and trust they have lost because of money and asset price manipulation. This has one ending, A BAD ONE. if the yen breaks convincingly over 100 versus the dollar it will liekly be accompanied by a complete loss of confidence in the BOJ and Japanese government and it will trigger the next phase of these badly conceived plans.
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