Chart of the day
Daily S&P
(click to enlarge)
S&P's broke both the 9 and 50 moving average and is closing in on the 20 day as a last line of defense. In terms of the Fib retracements prices broke the 50% and 38.2% and are looking at 1266 as the next level and the abyss thereafter. Problem I have here is that everything the Fed has done has been a coddling of the stock market. In addition, the fact that oil is off over $30/barrel in the last six weeks and seems to always be a reference point as a "strain" on the consumer when people comment on why stocks can't go higher. You'd think with this break in energy stocks may have benefited and it just was not in the cards.
Operation "twist" isn't helping the banks out in terms of positive carry with more flattening of the yield curve to come. The question I have is if we as a country need to sell more goods in order to stimulate the manufacturing plants that have nothing to build if we can't sell anything, and at what point are we going to stop kidding ourselves and look at devaluing the dollar? When are we going to start fighting the inherent inflation that is coming now and not putting off till later?
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
