That said, with the year most big funds have had it's any wonder that anyone went on vacation and many probably haven't. If you look @ the $spy volume for December 2009 (2.884 billion) and December 2010 (2.723 billion) we've already traded more shares than both @ 2.977 billion this December already, so somebody is still in the office. So I'm giving this market action more emphasis than I usually would.
The $spx is having a bit of a rough holiday season. A look @ the S&P 500 daily chart says it loud and clear.
Thing is, people have to eat, go to work, clothe themselves, be born and die which all cost money. People don't have to buy stocks. The defensive sectors are the best performing stocks right now and this should be duly noted.
It can all be boiled down to the ECB being the lender of last resort.. Until this is unequivocally the case this market will go down or side ways. We're not tanking precisely because we have the Fed as lender of last resort. As a matter of fact our Fed right now is the reason European markets aren't tanking @ this moment. The liquidity measures they put in place was a preemptive strike. It was played down but crisis need a lack of liquidity to really get the snow ball rolling down hill.
It's understandable to a degree why some in the EU don't want the ECB to be that lender of last resort because there's no policy cohesion so in effect the ECB would have their foot on the gas while individual nation states have control of the steering wheel and the break. The later of which they've forgotten how to use when it comes to their spending and there in lies the problem. In some ways the liquidity measures are not helping the cause as it gives EU leaders a super false sense of security and a warped sense of of how close to the abyss we really are. Think the warning in your rear view mirror "Objects are closer than they appear to be"
@ the same time countries don't want to give up sovereignty understandably. But either there won't be any country left or they'll be giving said sovereignty to lenders in exchange for a bailout... so.. yeah.
It's become apparent to me that these blokes don't understand that without a lender of last resort and growth nowhere to be found in vast swaths of the EU they won't be able to raise enough money to even kick the can down the road. This gives the market it's bearish tent. I think we can put the Santa clause rally to rest. No one will bid this market up knowing slow or no world growth is we'll see for as far as the eye can see. It takes some type of optimism for the future to get upside movement while it only takes uncertainty to get downside movement. And if we don't have anything else we have uncertainty... We have uncertainty coming out of our ears!
So I'm playing this market to the downside. The European debt crisis is kryptonyte to the Fed's super powers until they realize they're stuck between a rock and the abyss. I think that won't happen until the European markets are in full death spiral which should be a good time to cover a short... good luck traders, and best wishes for the holidays!