Hmmm. Apparently, prior to the inception of the euro currency Martin Feldstein warned that any future breakup of the EMU could lead to war on the continent...
Well, then, judging by the virtual inevitability of the breakup of the euro-zone, could one conclude war, indeed, might have been intended from the very beginning?
This question becomes all the more relevant when you consider it in light of calls to make a horrible example of Greece. A lurid proposal, no doubt, demonstrating a mind of questionable sanity, as well. For how much more loudly might those being targeted for destruction be inspired to chant the phrase "Due Diligence" in expanded protest? Funny how it didn't take long for the man who calls Europe's problems "overblown" to present the context in which his conclusion is made: from the distorted view of an imperial monetarist whose sophistry is incapable of fathoming the human consequence of reckless policies put in place over recent decades, which understanding otherwise might shatter belief in such financial alchemy as has brought the world to this most dangerous place.
Truth is the present bankruptcy of the euro-zone, and the trans-Atlantic financial system more generally, cannot be resolved without proper identification of the utter failings of financiers and regulators whose lack of due diligence played the largest part in creating today's systemic crisis. Those, like David Goldman, who believe this inconvenient truth can be swept under the rug while calling for a more brutal response in defense of the indefensible are no less suffering a delusional fantasy than were those in Congress who last year delivered "the most sweeping financial reform since the Great Depression."
The looming question on the chessboard rather simply is whether war or Glass-Steagall will prevail. Either way, for Adam Smith's Leveraged Ponzi Scheme it's game over — checkmate. With each new day, it seems, the probability of a major market turning point being at hand finds no shortage of aligned constellations making a financial calamity appear virtually inevitable.
No doubt, a growing sense of trouble ahead might be seen behind the shrinking portion of NYSE-listed issues whose point-and-figure charts are bullish. Yet the fact this is occurring despite the NYSE Composite still holding up rather well likewise delivers a subtle message revealing that, but a handful of issues are sustaining the market's levitation.
The importance of this observation is twofold. First, it suggests the market still could have legs. Its further levitation evidently does not require broad participation. More ominously, though, it reveals any future attack on today's thin leadership could prove nothing short of devastating.
The differential of NYSE new 52-week highs and lows presents further evidence that, the market's leadership remains intact. Thus, does the path appear clear for wave 5 of (c) ahead.
Of course, this conclusion does not alter the fact that, this very same technical measure over the past year has done nothing but confirm how very thin has been the market's leadership over the duration. Expect this glaring disparity to persist with the market's final lurch higher upcoming.
There's a case for claiming wave 5 of (c) has begun. Anticipated relative strength divergences registering this week as the market fell nominally lower have been followed by today's healthy relative strength configuration coinciding with correction of the market's initial lift off bottom. A decisive burst higher probably will not be much delayed. Further confirmed, then, will appear prospects a major turn is close at hand.
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