Monday, November 21, 2011

No Deal

Supercommittee disappointed with no deal and we're getting the gap down.  Ahead of Thanksgiving, the longs will look to lighten up, especially now that their November options protection is gone, and I'm sure many didn't want to throw what they thought would be more money down the drain buying December puts. 

We're going down the hole this week, it's gonna get hairy.  European bonds seem to be on the final stages of weakness, most of the weak hands are out, and we should see a bottom soon in the Italian and Spanish bond markets.  That should provide the needed backdrop for a sustained bounce once we bottom, either end of this week, or next week.  1175 or 1150 for a bottom, I am leaning towards 1150.

3 comments:

Anonymous said...

Looking at a lot of global market charts across Europe but also Asia and most seems set to go back to recent lows and for the sector more in the direct line of sight like European banks 09 crisis lows look the next most obvious level.

www.donovanac.com said...

This may be the last time a short on the TLT could be so good. Go all in on the TBT

Anonymous said...

Bac is close to closing at a new ytd low.

The financials are totally broken. While we will dead cat bounce at some point, I can't see any new move higher w/o financial's.