Strong markets buy bad news, weak markets sell good and bad news. It’s just the way it is. When the market gods have an agenda, it’s fruitless to fight it.
Don’t get me wrong, I think we have another twenty, maybe forty S&P points higher, then it will be time to deal with the realities of the macro world again. Anyone that thinks everything is just going to fall into place has unrealistic expectations for gravity. I trade this market because they won’t let me play with scissors anymore.
The French downgrade will inevitably jeopardize the triple A rating currently assigned to the main eurozone bailout fund, the EFSF, making it more difficult for the fund to raise money. Greece will implode and go bankrupt and this will spread more contagion. Italy, Spain and Portugal will be all the rage again, and “teflon” Germany won’t be teflon anymore.
Our debt grows at $46,000 per second. Tick Tock
Right now there is a disconnect, I penned a piece on this last week. The U.S. market doesn’t care about Europe right now. That disconnect wont last, but it could carry us higher for a couple of more weeks. Pundits are giving the “best house in a bad neighborhood” argument, meaning every market sucks but ours right now. Again, this wont last too much longer.
In the meantime I’m long all kinds of “stuff” and as choppy as the market is there are monster winners everywhere.
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