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Current Conditions:

One down four to go. How long will last nights agreement in Europebe celebrated? We feel that the initial knee-jerk reaction we will reach our first target of S&P 1275 at which point we will take profits on our longs from 1225. How long before the farce of a 50% haircut not being a “credit event” puts fear into all CDS traders as to the validity of all contracts. How long before the markets realize that this amount 1 Trillion E$ is about half of what is needed. How long before the markets start to look at the next problem Spain and then Italy and then France. All are many multiples of the just “solved” Greek problem.

On the bright side they now have a system in place to print as much fiat as needed.

Vix closed 29.86.

Current Positions:

S&P     Long    1227    Target  1275

HG      Long    3.222   Target  3.900

CL       Long    89.30   Target 96.24

SI        Long    32.70   Target  37.00

AU      Long    1630    Target  1850

EC       Short   1.4040 Target 1.3700


Market Behavioral Analysis: 

Expectations were met and exceeded. A deal was done. We are in the middle of the expected celebration. We expect short covering and some new longs to push markets to at least S&P 1275. How long before the markets turn their attention to the bigger problems of Spain and Italy? Last I looked they were still on the planet. It is certain that those problems will come to the forefront soon. Has anybody asked how Europe will grow with all of the austerity needed? Anyway, let’s enjoy it while we can. Commodities will resume their strength.


The bottom line remains that we are in a generational (Kondratieff Cycle) credit destruction, correcting 50 years of over spending and excessive borrowing. The Fed and ECB are and will print fiat until the conflagration burns through all savers wealth.



Econ News:


HDP                                        8:30am

Jobless Claims                         8:30am

Pending Home Sales               10:00am

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