07 October 2011

SP 500 and NDX Futures Daily Charts - Plus ça change...

The markets were under three primary influences today.

An FDIC memorandum concerning the details of the Volcker Rule which will be voted on next week was leaked, and it has some strong prohibitions about insured banks engaging in proprietary trading. The bank lobbyists were on full alert, and the politicos will be buzzing in the Capital this weekend. Try the steak and lobster at The Palm with peas and pearl onions with an apertif of soft money bribes.

The Non Farm Payrolls Report came in a little stronger than expected albeit because of a one time addition of 45,000 returning strikers. The recovery is there, but fragile, awaiting only a stiff dose of austerity to bring it crashing down, for the sake of short term political gains. Cloudy today with a chance of more economic hostage threats tomorrow.

Fitch issued downgrades of European debt (Spain and Italy) during the day, which had a marked negative effect on risk perception. The credit agencies have suddenly become fearless international macroeconomic forecasters. And you wondered why Ben and Timmy kept them around.

The equity markets are a nearing key resistance, and VIX is near the bottom of its intermediate trading range. The financials remain very sensitive to risk because they are, after all, the court officials of the credit bubble hive, right after the queen bee Treasury.

Have a pleasant weekend.