The angst over the Middle East War, the irregular strength in the US economy, rumors of financial institutions having problems with bloated reserves full of crashing US Treasuries is the perfect set up for a market crash or correction, right?
Futures seem to verify that this morning:
The futures are off the lows, gold is rallying, and there seems to be a flight to safety. The initial shock of the invasion however is wearing off and the Israeli military is setting up to clear out the remaining Hamas cells still inside southern Israel while preparing for a full ground invasion of the Gaza Strip.
Despite attempts to drag Iran into the conflict, the media in the US and Israel have only pushed the Arab bloc to reinforce their traditional roles of condemning war in general and warning Tel Aviv and Washington not to engage in overwhelming force to create massive civilian casualties.
Thus, based on all the grim news we should see massive volatility this week with the markets ending in a downtrend, right?
Wrong.
This is a week where earnings reports begin to filter out and in this author’s esteemed opinion the market will remain somewhat flat for the week. During this week I would be shocked if there was a move of plus or minus 2% for the entire week, with odds are it truly ends in less than a 1/2 % move overall in either direction.
Oil will rally some but the big rally will hit in the weeks ahead. If gold breaks back above $1900 I would be shocked so look for the precious metals to start rolling over again by the end of the week on more dollar strength.
If the markets fall today, it is a sucker bear play. Too many doomers will come out of the woodwork screaming World War III and Armageddon without realizing what will happen in the end.
Next week, however, is a different story.
Visits: 0
[…] I don’t always get it right, but when I do, kiss my hairy, sometimes gloriously tanned arse. […]