By John Galt
November 17, 2011 – 05:40ET
Nothing like waking up to a failed bond auction. Despite the spin, there is no other way to describe today’s 10 year Spanish bond auction where the target sale allocation was € 4 billion but they were only able to sell € 3.6 billion on weak demand and at a record high median yield of 6.745% and a high end yield of 7.08%. The Reuters headline hits the nail on the head:
From the article:
“The result was dreadful. They didn’t manage to raise the full amount and the bid-to-cover is really poor. The fiscal profiles of Spain and Italy are different but their yields seem to be aligning now,” said Achilleas Georgolopoulos, rates strategist at Lloyds in London.
U.S. markets will be totally focused on the European implosion and unfortunately a bunch of smelly Marxists who will be blocking subway platforms and trying to spread their Zuccotti diseases to poor schmucks who are just trying to make a living in New York City today. 1220 on the S&P 500 cash is the strong support line with a very high risk that it breaks this level in the next few trading sessions with a worst case scenario of the markets cracking it today on more than 1.4 billion shares traded (NYSE). Today will probably be flat like the futures are indicating but watch gold as the liquidity crunch accelerates more will be sold driving prices lower. If gold breaks $1722-$1725 by the end of this week it could indicate a capitulation across all capital markets and a sell off is in the very near future.
Have a fun day and remember don’t kiss a Zuccotticommie; God knows what diseases they created in their lab while they infested the park.