Bears to EU -"Show us your "Bazooka"
After my initial post on very strong evidence for a bearish stance titled "Is the the begining of the end of the Bull Market", it interesting to observe how fast things have changed in the last couple of days.
In the past 2 days, most markets that were above their 200 DMA `s have gone below it. They are Germany,FTSE and even Crude Oil. Some markets are just a trading day away to 200 DMA - i.e just +1% to +2% above 200 DMA. interestingly two of these markets that are just above 200 DMA `s also share an important characteristic - that is both are ZIRP or Zero Interest Rate Policy. No prizes for guess. Those two countries are US & Japan.
For Global Makets heat map - performance in the last 10 Days, here is the Red carpet. If this doesnt look like a beginning of a secular bear market that what does.
EU is all set to realise a credible emergency fund /plan to protect the Euro " A Bazooka "..as made famous by former Treasury Sec - Hank Paulson in July 2008 asking mega bailout support for Freddie & Fannie to change the down-cycle momentum. " "If you've got a squirt gun in your pocket you may have to take it out ... If you've got a bazooka, and people know you've got it, you may not have to take it out." and it turned out actual Bazooka was a mere water gun against an inferno. As from the point Paulson made that statement in July 2008, S&P 500 was 1300 and even after giving unlimited support to Freddie and Fannie , 4 months later by Nov 2008, S&P 500 was 38% lower or at 800.
EU to set up fund to prevent spread of Greek Crisis and to come out with a credible plan by Asia Markets opening time tommorow. Well if US could come up with $ 850 Billion TARP only to bail out US banks, I would not be surprised if this bailout package would be over that.But my take is at best it could offer a rebound only to provide another opportunity for bears to go short again.
By the way - here is a video lesson of how a Bear takes out all `supports` against Bulls that want to go higher and higher even after climbing over 80% in last 12 months. Enjoy the video..
Disclosure: Short : India `s Nifty Long : Gold