Click to enlargeNOTHING!
Nothing happened this weekend and I guess that's better than something because most somethings that are likely to happen are bad and the only something that MIGHT happen that would be good is not all that likely to happen - not soon anyway. So better to have nothing happen so we can hope that something will happen than to have something happen that turns out to be nothing after all, right?
Welcome to 21st Century Investing. Please do not make the mistake of discussing the actual BUSINESS PROSPECTS of the companies you buy and sell with an average hold time of 22 seconds - that's so 1900s. It's rumors, not earnings, that power the modern markets so you'd better have your ears on the ground and keep your nose out of the financial statements - making money is so passe' - especially since money isn't worth the paper it's printed on anyway. What matters is how much FREE MONEY our Central Banksters will give us to play with today. Then we can have fun, Fun, FUN 'till Bernanke takes our T-Bills away.
This morning "ECB Officials" said that the Central Bank could intervene and buy the bonds of struggling eurozone countries without unanimous approval, raising hopes that a bond buying program is still a possibility, and offsetting the disappointment caused by the bank's President Mario Draghi on Thursday. This is not new information but it's treated as such by Uncle Rupert's WSJ, who need a strong market as they look to split the company so Murdoch and his paper have billions riding on a positive market environment - not that that would influence their reporting of course - allegedly.
That was enough to get the Asian markets excited - again - and the Asian markets closing higher was enough to give the EU a good open (even though the reason the Asian markets went up was nothing that would have gotten Europeans to buy again but - they don't know that) and the EU markets going higher helps our futures go higher and that allows Cramer to go on CNBC this morning and tell you to BUYBUYBUY because, as Cramer tells us, the market is going to go higher because it went higher and higher is higher than higher so we need to raise our targets to reflect the higher highs that we can now project based on the higher futures which are in the past already - clear?
If so, then you are ready to join the beautiful sheeple and BUYBUYBUY and that's fine with us because we are SELLSELLSELLing our shares and we need someone to take them off our hands. As noted in this week's Stock World Weekly, we're back to Cashy and Cautious as the indexes make another run at the Must Hold Levels (5th time since May) on our Big Chart (see Friday's post for levels), where we certainly expect some overhead resistance anyway.
So the prudent move is to take our bullish profits here, grab some more trades from our Long Put List and then sit back and watch the fun. Meanwhile, according to the Financial Times, Major Wall Street banks such as BofA (NYSE:BAC), Citigroup (NYSE:C), Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) have generally cut their exposure to the eurozone as fears of a breakup increase, while they're also making preparations behind the scenes, the FT reports. These include trying to ensure that contracts denominated in euros won't be converted to any revived currency. One senior Wall Street executive said his bank was approaching derivatives counterparties to say:
"'We've got this contract, it's in Euros, what I want to know is in the event that Spain were to be redenominated are we going to end up being adversaries on this or can we just agree that this is a euro contact? Let's just move it to London law so we each agree that we know where we stand. If they don't ... when that contract matures there's not going to be any roll-over."
Banks have "Eurozone Crisis Units" and some hedge funds have stopped trading with Greek counterparties as government debt won't fall under even English or British law that the funds and banks are counting on to protect their positions with private entities in the event of a currency collapse. Keep in mind though that there's a difference between being prepared and inevitability. My own wife consulted on American Express' Y2K project for 18 months from mid 1998 until about January 7th of 2000, when they realized nothing was actually going to happen - but it was lots of fun making all the preparations in that global panic.
If "may all of your disaster preparations prove unnecessary" is not a Chinese blessing, it certainly should be. While we can't blame Y2K for taking down the Nasdaq in early 2000 - we can point to the LACK OF a disaster doing it, as there was a lot of money bet on the need for new software and new PCs and new programs, etc., etc. that never materialized and that took the steam out of the 100% Nasdaq rally that began in October of 1999 - at about 2,800, which just so happens to be the level they've finally gotten back to again.
So up or down 100% from here - if history is any guide - who knows?
Additional disclosure: Positions as indicated but subject to change.