"O Jerusalem, Jerusalem. You who murder the prophets, and abuse those whom God has sent as messengers to you. How often I have longed to gather your children together, as a hen gathers her young under her wings— but you would not let me. As you have willed it, so your house is now yours to command— but is made desolate. For I tell you truly, you will not see me again until you say, ‘Blessed is he who comes in the name of the Lord.'” Matthew 23:37-39
We saw the trend reversal today that I was expecting, as silver in particular was getting rather overextended based on the uptrend it has been following. I do not think this was anything more than profit-taking and a bit of a romp by the perma-bears who were licking their wounds and came back in for another go at the bulls.
So what next? Stocks really did not pull back much, except from the utterly unrealistic rally at the open, closing relatively unchanged. Treasury wants to sell its CITI stock and the Street wants the Chinese IPOs out the door.
Bonds got clipped pretty much on the same trend reversal theme although the 3 year auction did provide a spark by having a weak showing.
This market is without fundamental underpinnings, short term and transactionally oriented, rather like the American president, so let's give it a day to show us what is really going on.
The longer term outlook calls to mind an old quote from Norman Mailer:
"There's a shit storm coming like nothing you ever knew."
Washington Post Obama, Republicans reach deal to extend tax cuts, unemployment benefits By Shailagh Murray
December 6, 2010; 6:40 PM
President Obama and congressional Republicans have agreed to a tentative deal that would extend for two years all the tax breaks set to expire on Dec. 31, continue unemployment benefits for an additional 13 months and cut payroll taxes for workers to encourage employers to start hiring.
The deal has been in the works for more than a week and represents a concession by Obama to political reality: Democrats don't have the votes in Congress to extend only the expiring tax breaks that benefit the middle class. The White House estimates that the proposed agreement would prevent typical families from facing annual tax increases of about $3,000, starting Jan. 1.
Obama was able to extract an agreement from GOP leaders to support an additional 13 months of jobless benefits, a 2 percent employee payroll tax cut and extensions of several tax credits aimed at working families that were included in the stimulus bill.
The deal also would revive the estate tax, but it would exempt inheritances of up to $5 million for individuals and $10 million for couples. Democrats on Capitol Hill are strongly opposed to setting the cap at that high a level and to the 35 percent rate discussed by Obama and Republicans that would apply to the taxable portion of estates.
The White House is preparing for significant opposition from Democrats and will send Vice President Biden to meet with Senate Democrats on Tuesday. Later on Tuesday, House Democrats are schedule to discuss the proposed deal.
The Street is pricing three big Chinese IPO's this week, and the US Treasury has just announced its intentional to try and unload the rest of its position in Citigroup. So we might see equities hold together a little longer at what appears to me at least to be a lofty level.
I was taking some of my short term gold and silver trading positions off the table today, but added a few equity shorts so net-net came into the close weighted to a light expectation of a trend change in the next five days, in the form of at least a pause or a correction.
My overall portfolio weighting remains heavily invested in bullion as it has been since 2001, with a hedged position now long the US dollar. I do not like US equities here at all, but am trying to keep an open mind since we are so close to all our targets in equities and bullion.
Let us pray for those whose hearts are hardened against His grace and loving kindness by greed, fear, and pride, and the seductive illusion and crushing isolation of evil.
We pray that we all may experience the three great gifts of our Lord's suffering and triumph: repentance, forgiveness, and thankfulness. And in so doing, may we obtain abundant life, and with it the peace that surpasses all understanding.
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