The SP futures failed at the resistance target and have rolled over to near support at 850.
We are still in the end of the month tape painting but earnings are deteriorating badly, causing some of the major players to start edging towards the exits, taking their profits from this double bottom rally off the table.
As an interesting change, there is a groundswell of interest among the wealthy to own physical gold bullion: not paper, not miners, not ETFs, but the actual gold. This was even referenced several times today on Bloomberg Television and in interviews from Davos. There are also fresh examples of delivery problems from Comex, and in particular with regard to 1000 oz. bars of silver which is something new. Previous shortages from commercial sources had been reported in the smaller unit bars only, with the Comex seen as a steady source of the big bars.
Part of this seems to be a swirl of talk coming out of London that there is going to be a bank holiday, and a major government action to shore up the financial system.
We do NOT have any particular insight into what is driving this and the specific short term timeframe. Rumours are easy to ignore since in the short term the technicals on the chart are most important to us, and specific news events. The macro events are on our 'radar screen' and are looking for any specific data or potential trigger events.
As a reminder, GDP for 4Q comes out tomorrow. Wall Street is bracing for the worst print since the Great Depression, on the order of -6%. Given the lags, and the monkey business that the Government plays with the numbers, we're not willing to bet on 4Q, although it does serve their purposes to come out badly, justifying the stimulus program.
"The wind blows where it will, and you hear the sound of it, but you do not know whence it comes or whither it goes"
