S&P downgraded US debt on Friday evening and the markets gapped down big to open the Globex session last night. The final day of trading last week saw the largest volume since the 2008 financial crisis and that was on top of huge volume already traded in the preceding days. What popped out the most in my mind though, was that the markets finished almost flat on the day. This means that there were almost as many buyers as there were sellers when it was all said and done. That's a lot of buyers in what appears to be a doomsday market environment. I see this as a sign of pretty significant support forming.
Talking to people in the streets, panic is clearly in the air. I returned a rental car today and the gentleman behind the counter asked me if I heard anything about the markets. He was nervous the world was coming to an end, or at least the financial stability of the United States.
With fear in the minds of the masses along with the current market action, I can't help but feel there is a buying opportunity upon us. I will be looking for long opportunities today. There is currently support below 1170 on the ES. I still see 1150 as a potential level that could be hit. If that happens and support holds, I will be very quick to get long. I won't defend longs however if a rally doesn't begin soon after. That's what I am looking at as I write this, let's see how the market opens this morning...
Gold and Silver Futures looking strong as well. This is no surprise as rumblings come out of Europe that the Central Bank will buy Italian and Spanish bonds in an attempt to curtail the sovereign debt debacle (Europe's version of QE). Will the money printing ever stop? Probably not until fiat paper is worthless...
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I had a typo on my levels, I meant 1170 and 1150 not 1270 and 1250... updates in Bold
ReplyDeleteWhat will happen when paper money becomes worthless? Could the developed world be heading for a barter system? I can't imagine. Or can I?
ReplyDeleteI think you are imagining it... :)
ReplyDeleteAll those without real assets like commodities and metals or stocks in companies that actually produce something useful, will lose any wealth they think they have.
A barter system? hey anything's possible, but what will likely happen is that there will be a new currency issued, you will be able to trade in your fiat currency like the dollar or the euro for a fraction of what you thought it was worth. Eventually nations will build themselves up again. But the common man will have to endure the pain and fight for his survival in the process.
I heard a quote recently, but can't remember who said it:
"I fear for the common man. I fear that for him, it is the end of living and the beginning of surviving."