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With Greece and the end of QE2 under its belts, it was 'risk on' for Wall Street as the VIX plummeted and the safe havens of gold, bonds, and the dollar were shunned by funds eager to squeeze the shorts in the equity markets.
What next? Today was very light volumes with Canada Day and the July 4th holiday weekend, and next week will likely also be light trading, with many North Americans away on holiday.
Let the market come to us. The short term trend reversals look overdone, but they may not be over because they suit the FED and the government quite well.
This *could* be a kind of stealth QE3 - market interventions through third parties and jawboning.
And yet at the same time there has been a 'stunning plunge' in commercial gold shorts.
A coincidence of the Greek crisis and the end of QE2 had a lot of bears leaning into the short side of the market. When Greece was finessed for the short term, and the end of QE2 did not produce the forecast immolation, the short term trends turned sharply, and it was 'risk on' with the dollar and gold and bonds weakly falling and stocks soaring.
So what next? In the short term this equity move looks a bit overdone, but until volumes pick back up it may drift even higher unless something happens. I think it would be hard to be too cynical about this market and the US governance model in general. Lies, easy money, oath-breaking, and double dealing seem to be prevalent.
Zynga Files One Billion Dollar IPO
Late breaking Friday after the close news, the SEC is escalating their investigation of St. Joe's and names chairman Bruce Berkowitz.
Overall the problems in the economy and the financial system are not being dealt with effectively at the source, and the coverups continue. Any time a reform, or even an assertion of the law and justice, is undertaken, the financiers respond with threats of crashing the economy. This is due in large part to their faithful servants in the Republican and Democratic parties, and the weak-kneed American president.
Have a pleasant holiday weekend Americanos, and we'll see how Asia opens on Sunday evening your time.
Silver proved to be a little more resilient than gold today, although both held their levels fairly well as the Street was engaged what is snarkily called 'window dressing,' which basic means rigging the valuations of the market.
Nothing has changed. Let's see how the holiday shortened week trades as we kick off the third quarter, and in two weeks, US earnings season with Alcoa.
The US dollar index continued its decline, as fund managers put forward a herculean effort to optimize their bonuses by buying equities.
On the bright side, Hans Nichols of Bloomberg Washington is reporting that Timmy Geithner may be leaving the government after the budget deal is done. Just another compelling reason to hope for a quick resolution.
Or maybe not.
One shudders to think who Obama might put forward, and what the confirmation process might look like in Congress unless he chooses someone to the right of Andrew Mellon.
Given his past history of selecting unexpected candidates somewhat over-friendly to corporations and Wall Street, one can only wonder.
The paint was going on thick and heavy today for the end of quarter, as the trading desks and hedge funds were optimizing their bonuses. Let's see how we go into the US holiday weekend.
