Tuesday, June 28, 2011

Last Gasp or Last Hurrah?

As another day-long rally appeared out of the blue for the second consecutive day on virtually no news, one must question the tendency of the market to gain so vigorously without the benefit of positive reinforcement.

With stocks being nearly the only place to find yield these days, there has to be adequate risk appetite, and that's where the low volume standard comes into play. On these monstrous upside days, the volume has remained quiet, signaling to the astute investor that such rallies are nothing more than algorithm-inspired events and have little to nothing to do with news flow, fundamentals or general sentiment.

As such, there's little to report on today's ramp-job than to mention that the Greek parliament will vote on the austerity plan by which they will get the next portion of their bailout money on Wednesday morning, 5:00 am EDT, so as goes the vote, so will stocks. A failure for the parliament to pass the measure would result - mostly likely - in a massive default by the Greek government or some other form of restructuring, because, as we all know, bankers cannot lose money, even if they lend to the worst, non-performing, severe-credit-risk entities, like sovereign nations such as Greece, Portugal and Ireland.

If the vote passes, the people will riot and burn most of Athens back to it's root of civilization foundations. Thus, nobody wins, except the banks, though it could be a hollow, short-lived victory as not only Greece, but other EU nations, have debt well beyond their ability to repay, no matter how much they tax the populace.

We have reached a tipping point in the global economy and the sooner politicians and bankers realize that their Ponzi scheme has hit a wall, the quicker the world can get back on track to some normalized kind of functioning reality. Until then, though, it's risk on, rally on!

Dow 12,188.61, +145.05 (1.20%)
NASDAQ 2,729.31, +41.03 (1.53%)
S&P 500 1,296.67, +16.57 (1.29%)
NYSE Composite 8,135.98, +104.90 (1.31%)

Advancers finished well ahead of declining issues, 5045-1528. NASDAQ new highs: 100, new lows: 22. On the NYSE, 75 new highs, 23 new lows, bringing the combined total to 175 new highs and 45 new lows on the day. As decisive as those results may be, skepticism abounds due to the aforementioned thoughts and the incredibly low volume.

NASDAQ Volume 1,660,870,000.00
NYSE Volume 3,650,911,750

Oil rose $2.28, to $92.89, defying all manner of logic. Someday soon, hopefully the assholes (that's what they are and that's what I'm calling them) trading oil futures are going to be hit with a bolt of lightning and the realization that absurdly high oil prices are a detriment to global growth. It could not happen soon enough.

Gold was up 4.10, to $1501.00, while silver rose 36 cents, to $33.94, both breaking a three-day losing streak.

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