By John Galt
November 15, 2011 – 05:15 ET
The European Union’s reserve currency is showing signs of cracking again this morning as it falls back into the 1.35 range once again and the Italian/Greek/Spanish/Irish/Portugal/Hungarian/Austrian/French debt/banking/government crisis (circle all which match today’s news) accelerates into the winter. The only thing missing is a group of alcohol filled or drug induced bums and losers marching on the stock exchanges or city halls of large cities in those nations; er, never mind, that’s in the U.S.
Needless to say that is quietly unsettling the U.S. equity markets as 1254 fell with little fanfare once again yesterday and 1220 is now in range for another test to the downside. That would make for interesting scenario since the S&P 500 has basically floundered there since the late 1990′s with occasional moves higher mixed in with terrifying collapses to the cellar. There will be a retest towards the March 2009 lows and the idiots in the “Supercommittee” could well be the catalyst for getting this party started.
Today watch for a mix of action based on news from Europe and the quarterly dissecting of the 13F’s of the big boys which seem to indicate that some have been smoking the Occupyweed, by buying BAC (Why buy an insolvent bank again?) and others selling their GLD. If we see a sharp break with volume in the morning due to the economic news, watch out below as 1220 could be breached in another dramatic one day decline. European bond yields are falling apart again with the Italian 10 year BTP back over 6.9% and the ECB impotent to act in an effective manner.
Kaput is where this baby is going, just like the European Union, watch and see.