An All Clear From The Academy ~ The Risk Averse Alert

Tuesday, July 12, 2011

An All Clear From The Academy

This is how bad it has gotten! The pot calling the kettle junk! Confidence... confidence... confidence... That, my friend, is an echo.
Moody's Cuts Ireland to Junk (CNBC, 7/12/2011)

How about a little short and technically sweet tonight?


Relative strength (top panel), having late-June positively crossed into buy-side territory (above 50), but reaching no extreme (above 70), now in balance with the sell-side (at 50) ... with volume showing no real urgency over the past couple days down — rather it appears risk's tender offloading to a diminishing interest continues, much as occurred during the recent moonshot — and then seeing momentum's trend (bottom panel, red) positive and rising ... things look up, yes?

Well, yes, but maybe not right at tomorrow's start...

SPX 1-min

This looks set up for a June 23rd-like capitulation. This afternoon's increasing weakness might reach a crescendo at tomorrow's open, then.

Forget not elevated hedging, though. Any rough start seems likely to be saved. Indeed, this would serve a predatory interest, too, at least for as long as those being force-fed are willing.

Pollyanna over at the Alan Schwartz Academy of Denial says no Lehman II, so I guess that's an all clear to the slaughterhouse, er, uh, I mean the feed trough...

Fast Money
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