Today did alot to narrow and move around the various probabilities. In general, it was very very bearish. Not only did the market finish on its lows, not only did debt continue to sell off, not only did the financials never look like they had anything going for them all day, but Europe market reaction simply stunk it up. Europe was down like 5 to 6% in two days last week. The bounce day today was very anemic. It quickly went up about 1% and than over the next few hours gave it all up going into negative territory before finishing the day up between .5% and a 1% for most of Europe. There may be more bounce to come but in general that was a dismal showing.
Really for good reason. I read stories on what kind of champagne the bankers drank at the G7 and the meeting in Australia but nothing of substance came out of it. More of the same. The market obviously had to be disapointed if they were expecting anything over the weekend.
Today was an important day for the markets. If the markets would have surged out of the gate the technicians would have been jumping up and down. As it was, the price action was abysmal.
No one is talking about it but I believe a crash (move down of more than 5% in a day) is really high. Where normally such a move is maybe in the thousands of percent in any given day, I think the probability is pushing 5%. Now the inverse of that is that there is a 95% chance it doesn't happen. But if I am right that it is as high as a 1 in 20 chance that the next day or two could see that big of down move, it is nothing to sneeze about.
I will actually be spending the night in my office (second time I have done this) (already have the blow up mattress monitoring Europe throughout the night. Who knows, maybe the market catches and not that big of a deal but if we break down below the 1040 area, it is a long way down.
Saw this on Bloomberg:
Greek Finance Minister George Papaconstantinou said he can’t call for outside aid as his government struggles to cut the European Union’s largest budget deficit.
“The worst possible signal which we could send out is one calling for outside help,” he said in an interview with Bloomberg Television in Athens yesterday.
Wait a minute. Isn't that a defacto cry for help by saying you can't cry for help?!?! EEEKK....I don't think that is good.