The gush continues in the Gulf and some of the oil has caught a current that could take it who knows where? The oil service stocks caught a bounce like so many other broken names yesterday, which by the way probably saved them(for now) from another leg lower as so many were teetering on a trapdoor with glaring technical bear flags on their daily charts.
Greek is now a third world nation and has been booted out of the Europe Stoxx 600. The European country ETF’s (EWQ,EWG,EWP,EWI) all caught dead cat bounces yesterday before another leg lower. They are shorts on rallies all day long for my money.
The European implosion is so eerily reminiscent of our 2008 deleveraging, Hollywood couldn’t choreograph it better if they tried. The steady, ongoing rise in Libor and other key measures of tensions in the money markets were blamed for undermining sentiment in equity markets around the world Tuesday, reminding investors of the near-freeze in credit markets that threatened to shut down the global financial system in late 2008 in the wake of the collapse of Lehman Brothers.
TED spreads are rising too (remember?) and the Bank of Spain over the weekend, seized CajaSur, a troubled regional lender, and moved to consolidate other institutions. A 20% unemployment rate and a collapsed housing bubble will prevent Spain from going anywhere but down for a very long time.
From my perch there are mini Bears and Lehman’s all over Europe. It’s just early in the game.
I’ve been talking about Europe for months on the Premium Site, so check it out.