A Greek (style debt) tragedy is being written in America. Starring California and Illinois and other states, it will be the story of a nation whose states begin to default on their debt obligations. The suspense will be to see which one goes bust first. Uncle Sam is likely to play a role as he tries to bail out the state. But as others get into trouble, for how long can Uncle Sam hold up to their debt loads? [more]
A couple of posts recently asked where support levels were. One answer is there are various support levels depending on the models you use. But the markets are now close to a vital support level. Watch out below. [more]
Oil consumption declined overall in 2009 in the biggest decline since 1982. This is another sign of deflation for a world slowing grinding to slower production and consumption. A large ship has a lot of momentum and will take time to slow and this has been the case for this economy. [more]
Stocks are barely afloat on light volume. Each rally since the low has come on lighter volume. Prices are on the verge of a plunge.
Top tick for this rally was SPX 1106, shy of my 1110 target. I have built short positions anyway above 1100.
We are ripe for a wave 3 of 3 downward resolution. A failure to recover and reach a new high today strengthens the near term bearish case. Breadth and volume are pointing this way.