Emini Trading Update – Thursday 14 June 2012 (11:29)
Do you feel it too? Rallies lack conviction. No one is in a hurry to buy, they’d rather wait and see. That’s what I’m seeing.
Today, someone really wanted to kick start things and get us going through 1,320. Yes, we closed above that important resistance level but the adjusted TRIN Index reading was only 4 – showing equal buying and selling. So not exactly a huge vote of confidence.
We’re winding up for our cyclical resistance levels on the risk-on charts. And if we’re really in a down trend now, those resistance levels will print quickly and not get broken.
Link of the day …
I hate reading the economic news these days. Seems like common sense no longer exists. Obvious facts are swept under the carpet. Solutions are proposed that benefit vested interests, instead of addressing the real problems.
So it’s refreshing to see some straight talking. This time from Henry Blodget at Business Insider, who hits the nail on the head.
The Spanish banks are insolvent and this is how you wind up a bank, in 7 steps:
- Seize the bank
- Fire management
- Write down the value of the bad loans to the amount they are actually worth
- Zero out the bank’s equity (shareholders lose everything)
- Apportion the losses to the bank’s subordinated debtholders (they lose something)
- Inject new capital in the form of senior debt and new equity
- Re-float the bank (by selling all or part of it)
Now why is that so tough? Lending more money to an insolvent bank to “fix” it’s balance sheet is – well, dumb. We’re going to go around and around this, until the facts are accepted. And in the meantime Europeans will continue to pull their money out of the ATMs.
Good luck with your Emini trading.