Home > Uncategorized > 2012/02/10: Quick Post: Courtesy Access to Rohr Report Market Alert Today

2012/02/10: Quick Post: Courtesy Access to Rohr Report Market Alert Today

© 2012 ROHR International, Inc. All International rights reserved.

Short & Sweet (well, maybe not so sweet) today. The further devolution of the Greek debt situation into the intractable state we had expected at some point seems to be upon us. The market manifestation of previous good news was March S&P 500 future pushing so extensively above its resistance at 1,310-15 last Friday. That was truly impressive, as it also represented a fresh UP Break out of its nominal down trendline across the highs from last May and July. As noted on Wednesday, this brought about the typical perverse evolution of expectations then applied, as the extended up move meant the burden of proof was obviously on the bulls to put the market up through serial resistances in the 1,352.70 and 1,367 areas (the lead contract futures exhaustion high from early last May.)

Especially with the DJIA and NASDAQ 100 already having traded above last year’s highs any violation of the old high in the S&P 500 future resistance should represent the final confirmation the equities can likely significantly extend their rally. And yet, it only managed (in premarket electronic trading yesterday morning) to trade within a whisker of the 1,352.70 lead contract futures high from last July prior to slipping back on the day.

Of course, this is all about the significantly divergent economic influences from a seemingly improved US economy driving equities higher while there is a far less friendly outlook for Europe. That is creating both a specific economic drag, and a cautionary psychology for even the US equity markets. Some say the latter would be trading a lot higher already (based on expected earnings and a reasonable multiple) if it were not for the combined general recessionary drag from Europe, and…

…the risk of significant exacerbation of those tendencies if the Greek Debt Deal fails to materialize timely. Of course, that has been something which week-to-week and month-to-month has missed every deadline for agreement on combined austerity and debt forgiveness. The many convoluted factors are now seeming to become more intractable (as we had surmised they might), and that much more critical due to a key “real” deadline.

That would be the March 20TH refunding deadline for €14.4 billion of Greek bonds. And if there is going to be any sort of meaningful Private Sector Involvement (the summary phrase used for the ‘voluntary’ dilution of the value of those bonds by private sector holders), the deal should have already been struck last week at the latest. That was when agreement was necessary in order to allow the time to effectively complete all the paperwork. Yet the situation becomes even more convoluted now that the European Union powers-that-be have rejected what the Greeks felt was the most extreme compromise that could possibly get their public and politicians to accept.

All of that is covered to some degree in our analysis today, along with a very well-crafted article from this morning’s Financial Times. We provide a link to that article in today’s Rohr Report TrendView MARKET ALERT institutional edition. Enjoy the access to that for our concise views until we post that more extensive general discussion of whether the global economy is really seeing a major ‘frame of reference’ shift based on the recent positive economic data.

That includes review of the how the European long-dated government bonds managed to shake off a bit of a minor technical failure yesterday, and what the lead contract Copper future (versus just the equities trend) is telling us about whether the real economy is actually on a sustainable strong. The summary background and specific technical contingencies remain very consistent with all of our previous views.

Thanks for your interest.

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