Wow, day 10 already?
What an exciting year 2011 has been already. Last Monday we predicted we’d be following the chart on the right where we had a big opening day and then some violent up and down swings that actually have the amazing net effect of LOWERING the Volatility Index (VIX) as Lloyd Blankfein continues to do God’s work by running the same Alpha 2 program he ran last year to herd the sheep into the slaughter that followed January’s option expiration day (Jan 19th).
This time, things will be different – because options expiration day is the 21st! Other than that, so far, not so different with the Dow gaining the exact same 200 points in the first week of the month, finishing on that same down note we had the first full-week’s Friday of 2010. The danger to this pattern is the dollar – which is breaking up ahead of schedule and, as discussed in-depth in this week’s Stock World Weekly, the dollar rules the markets and even the mighty Goldman Sachs’ TradeBots can’t fight the multi-Trillion Dollar daily Forex market for long.
Last year, the Dollar didn’t pop 81.50 until March, when we were already recovering from the market dip. This morning, the Dollar is already drifting over 81.50 and looks like it may head higher, as the Euro is testing it’s lowest levels ($1.28) since early September, when we were having a bit of a rough patch in the market. Since then, the Euro was up 10% and the US markets went up 10% (what a coincidence!) but now the Euro is back down 10% and the TradeBots are working overtime just to keep us on track. Who will break first? This is very exciting stuff but, it looks like the rest of the World is beating us to it so far:
Wow, that Baltic Dry Index does not look good, does it? According to Bloomberg, freight rates for commodity shipping are at the lowest price since 2002, when China’s economy was 75% smaller and the S&Ps GSCI commodity index was 67% lower. What can this mean? Well, for one thing it means that all this commodity trading that’s driving up prices has NOTHING to do with demand and is NOTHING but speculators trading bits of paper back and forth while the…
