Yeah, a storm is threatening
My very life today
If I don't get some shelter
Lord I'm gonna fade away
--Rolling Stones
After yesterday's carnage in Europe, domestic markets put on a brave face after gapping down 3%--grinding higher basically all day to close down 'only' 1% or less. Bulls have to consider this a victory, or at least a temporary reprieve.
I continue to sense that US markets are not adequately discounting the risk streaming from Europe. Today's action was a nice example of that.
My friend Fil Zucchi expresses the EU situation well here. Like him, I smell trouble in the air for the next couple of months.
Accordingly, I continue to add to downside exposure into price strength.
position in SPX
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1 comment:
The bottom line is that even if the fiscally-challenged countries of Europe do not end up defaulting, or leaving the Union, the reality is that they will have to take draconian measures to meet their financial obligations.
And, if Greece did attempt at a debt restructuring, rest assured that Italy, Spain, Portugal and Ireland would be next — we are talking about a combined $2 trillion of potential sovereign debt restructuring that would more than triple the $600 billion direct cost of the Lehman bankruptcy.
~David Rosenberg, February 2010
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