“The direct exposure of the U.S. financial system to the countries under the most pressure in Europe is very modest.” -Timmy Geithner
All the pain is gone, the market is fixed, Merkel said so. The fianacials, from, my perch, are still going lower. As you know, I don’t care if the market goes up or down, I just want it to go. I’ve bet on football, stocks, crab races in Key West, I even bet my wife that the Playboy Club TV series would be cancelled after three episodes, think it got cut after two last week, just give me movement.
Maybe Geithner is right, but the subprime crisis was contained too. Remember???
The SPDR Select Financial etf $XLF, has been in a series of bear flags on the daily chart, it seems to rally for four of five days, but then it resumes its series of mini death spirals. I guess if the true market bottom was put in last week, then this could be the last bear flag for a while. I beg to differ with the perma bulls on this one because bear markets usually end with a whimper not a bang like the one we just saw. Capitulation happens, then sideways for a while until a bell goes off and the new bull market begins again. I don’t think we have seen capitulation. If I’m right, the hounds from hell haven’t even started to warm up yet. Much depends on Europe.
I much prefer being long than short and we have played this whole drama very well from both sides the last couple of months, very well. I can opine on why I think we will still see 1040 and maybe 980 and still be long stocks all day. That’s my macro view, but I try to trade micro. The two mindsets can coexist peacefully in my mind even though they can be completely opposite.
No one can tell me the algos aren’t ruling the roost right now. As a trader it’s like trying to bitch slap Megatron. You can’t win. The key is not to fight it, you won’t win, just exploit it. Follow those black pool micro ticks like your life depends on it. Nano nano.
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Good luck next week.