By John Galt
November 4, 2011 – 05:10 ET
The front page from the November 2, 2011 edition of Liberation pretty much sums it all up:
And the chaos continues this morning. The S&P 500 achieved the technical support level of 1254 yesterday but the rally was on thin volume once again. Each rally has less breadth which is a nagging indicator to me that any bit of bad news will probably drive the markets down rapidly and violently. Gold is still building on its old base and must break $1800 with contract volume if this rally is to continue. Also the short covering move in the Euro above 1.38 is a joke as it will roll over once investors and the world wakes up and understands that Greece is only a small part of the problem as Ireland, Portugal, and the big sausage, Italy, is about to spice things up when Berlusconi’s government collapses.
The unemployment report will come in overly optimistic once again but U-6 (non-seasonally adjusted) will probably remain at stubbornly high levels which is the only indicator worth watching in the whole report. I’ll break that down on my podcast tonight. Strap your helmets on tight as this will not be a market for the weak at heart nor a weekend for the brave to be long, in my honest opinion. The protests, riots, and world events (watch the Middle East) are about to overtake the bulls once again.
In the mean time, look for a morning rally then afternoon fade with the markets staying in a tight +/- 2% range for the day.