16 June 2014

SP 500 and NDX Futures Daily Charts - Argentine Stock Market Goes Boom

It took some doing, but over the weekend I was able to explain to an engineering friend why the US equity markets can continue to drift higher on light volumes. There is little real selling to exert downward pressure, and with liquidity in excess in all the 'right hands,' a bubble in certain classes of paper assets can easily develop, in what becomes a feedback loop.

I think the analytical mind blanches at the realities of modern finance.   And the realization that in many ways it is a con game.  How can such things take place in the holy of holies, Wall Street?

Speaking of the realities of modern finance, the FOMC will have another meeting this week. There is speculation that Old Yeller will pull back on the party, but I doubt this very much.
On the colonial front, the Argentine stock market (Merval) crashed over 12 percent today as the US Supreme Court refused to hear the case, thereby ruling in favor of its creditors.    The Argentine government has described these funds as 'vultures.'   That does not bode well for a quick resolution.

Have a pleasant evening.