Jun 14, 2011

Short-term: 1 green, 3 yellow
Intermediate-term: 2 yellow, 2 red

Looking underneath the numbers and comparing them to last summer. There is more technical deterioration now than last summer for most stocks but there are also more stocks that are bucking the trend. Still don’t know whether this is simply a bit of delayed rotation or if, for the first time in a long long time, the correlation of everything to everything else is beginning to break down. I’ll have a better update on this over the weekend.

Fortunately, as if we are living Groundhog Day, the market-moving news is precisely the same news as last summer. Greece is in trouble with its debt and Europe doesn’t know what to do. Unfortunately, unlike Groundhog Day, one should not expect a happy ending. The masters of the financial universe are not capable of learning from their mistakes because they are incapable of admitting mistakes in the first place.

So they will screw things up as much as they possibly can. Then kick the can down the road when they can’t think of anything else. Then steal whatever is not nailed down. Unless of course they can also steal what is nailed down as well. Then start a little flim-flam game in order to divert attention. So the question of whether it will be Groundhog Day again next summer is really up to the rest of us since we are the ones who allow this nonsense to keep repeating. I am not optimistic on that front either.

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