Friday Fail: Melt-Up Odds Trampled in Rush for Exits ~ The Risk Averse Alert

Tuesday, June 11, 2013

Friday Fail: Melt-Up Odds Trampled in Rush for Exits

TO READERS WITH DEPOSITS IN HSBC: You better start wondering whether the U.S. Justice Department, through its surveillance of Verizon and its PRISM program, has evidence of HSBC conduiting [laundered] funds to British- and French-backed, al Qaeda death squads in Syria. This warning is only the more heightened in its relevance to financial and political reality by news today Citigroup will suffer mightily as a result of a fast developing U.S. vs. Japan, "beggar my neighbor" currency war whose certain outcome will bring the precise opposite result Citigroup is betting. In case you have been sleeping these past five years contraction is the certain outcome of a hyperinflationary monetary policy attempting to sustain a gigantic mountain of illegitimate debt. Citigroup, contrarily, is betting on global expansion and growth. Bottom line: it should be as plain as the nose on your face that, we are at the threshold of unbridled trade war whose consequence is certain to disproportionately impact banks in an era of globalized finance. Citigroup being the bank from which the U.S. Treasury Secretary hales might only raise odds of an orchestrated panic venturing to expand the bank's deposit base at the expense of what are otherwise vulnerable banking institutions across the globe, which possibility ultimately culminates from intrigues initiated by Venice on the Thames attempting to weaken the institution of the U.S. presidency.

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The market's weak, weak technical underpinnings were on full display today...

Mind boggling is the fact that, the NYSE Composite Index is a mere few percent below its best since March 2009, yet finds the differential between listed issues reaching new 52-week highs versus lows solidly in the negative. All the more perplexing is reality finding the NYSE Composite Index today printing about 18% higher than mid-November 2012. In a word? Garbage. Above is proof.

Behold one of the key measures behind the cluster of Hindenburg Omens registering over the past few weeks. This is not the kind of "signal" we might expect prior to a market melt up. So, cancel Friday's prospective outlook. If in the cards were only more accelerated QE from central banks across the globe, then the wares on the New York Stock Exchange would not look so thoroughly undesired as long-term holdings. It would seem this fact represents the essence of this morning's consternation over failure of the Bank of Japan to indicate a willingness toward ratcheting up its hyperinflation, a disappointment plainly hastening a more vigorous move toward the exits.

The open question right now might be whether major indexes reached a secondary peak in May, five years from likewise reaching a secondary peak in May 2008, and are now poised to crater in a big way. Of course in the mainstream there is no shortage of sentiment seeing the market's near-term prospect from the vantage point of perspective presented here Friday. This, itself, bodes ill for new index highs. Still, imminently, a period seeing index momentum simply turn over probably is the most certain likelihood here. What follows in the way of challenges to index highs reached in May is a bridge better crossed once we have clear sight of the breach selling pressure still to materialize appears due to create over coming days and weeks.

Word on the Street
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