Monday, June 6, 2011

Morning Update/ Market Thread 6/6

Good Morning,

Equity futures are close to even this morning, with the dollar higher, bonds lower, oil lower, gold slightly off, silver higher, and most food commodities lower.

There is no meaningful economic data today, and in fact very little meaningful the entire week ahead. That’ll make the market moves interesting as people are left to ponder rapidly weakening data and whether or not more “stimulus” is on the way.

My take is that without more, the economy will quickly give way to deflation. How far will they let it go before the next round of even more massive intervention is the only question, and that’s a question that we can only guess at, so why bother? From my perspective the markets are completely broken, completely captured and thus playing at this juncture is absolutely worse than gambling, it’s only feeding the sharks.

Still, observing the markets contains value as far as keeping awareness of the situation around us. On that basis I note that the SPX on Friday descended right to the bottom of the May down channel. It needs to bounce here or that channel will be broken, and so will the April lows:

When the Nasdaq produces outside inverted hammers like the one on Friday, it draws my attention as it is a possible reversal indication:

That said, if prices slide below that hammer today then it’s a bearish sign, and that makes the action today important in assessing the decline so far which has actually been very mild and may just be a correction within the ongoing money printing uptrend. Time will tell.

Meanwhile, the Japan situation is only getting worse – their situation is dire and the admissions of the disaster and possible future risks are slowing coming to light. The problems at Fukushima were not just tsunami related, the problems began from the earthquake. We have many plants that are just as vulnerable here, and Arnie Gunderson addresses emergency preparedness in his latest video which is worth a listen:

White House & NRC Recommend 50 Mile Fukushima Evacuation, Yet Insist US Safe With Only 10

Our inaction in this regard is just another example of corporate capture and that capture clearly jeopardizes all our safety. Again, these problems are all interrelated, as the captured economy is feeding the money producers at everyone’s expense. This is a situation that is not sustainable and therefore change on a major scale is coming – hopefully sooner than later.