What a disaster for Boehner & Co. last night. Did we really need another warring faction? What are we — Greece!? Wait, don’t answer that! The markets will not take kindly to this additional complication.
Today’s theme song: Maureen McGovern’s song from the 1972 Poseidon Adventure. Don’t laugh, it won an Academy Award!
What sold me were the movie clips that Brendan Thompson matched up to the song on YouTube. Perfect metaphor for our current situation.
It opens with Larry Kudlow studying the charts: “obviously a buying opportunity!” as the bulls party like it’s 1999 with Bernanke (Hackman) leading the cheering.
0:18 – In a cameo, Yours Truly sounded the warning, but it was left on the cutting room floor.
0:30 – Things are suddenly not on an even keel. Quick, call the Plunge Protection Team!
0:47 – Boehner’s motion is “tabled.”
1:06 – Things have stabilized; experts encourage investors to “hold on.”
1:12 – Bernanke leaps into action. It’s a crappy job, but he’s just the man “in the end.”
1:16 – A private conference between Merkel and Draghi: “I thought we were in trouble!”
1:18 – Harry Reid restrains a screaming Eric Cantor: “This is what they wanted all along!” as Pelosi dives over the cliff.
1:30 Boehner makes another brief appearance.
1:53 – Pelosi caucuses with one of the last remaining moderate Republicans. Together, they hatch a risky plan — find a political middle ground that will preserve the country’s future.
2:16 – Obama is there to announce that disaster has been averted, since…
2:18 – Everything’s fine, now that Helicopter Ben has arrived.
In terms of the current markets, I’d put us somewhere around the 0:35 mark. Enjoy!
Note: has to be opened on YouTube due to copyright considerations.
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All I can say is “thank God for Congress.” They make life so much more…predictable. While the PPT swings into action, trying to clean up the mess, Boehner reiterates just how far apart the two (how many?) parties remain. Thanks to the failed House action last night, we now know just how divided are the Republican ranks.
First test: the channel up from 1343, which coincides with a Crab Pattern completion — not to mention a nauseating diatribe from the MSM as to why this is a buying opportunity. I remain short from 1447 on the 18th [see: CIW – 1:10PM Update.]
SPX would have tagged the .618 at 1425.68, but that would have been a pretty obvious breakdown of the channel.
DX completed the small Crab Pattern we’ve been tracking. Expect a pause, but not much more. The currency markets are harder to control than the equity.
I think it’s safe to say our forecast continues to be on track. Downside targets coming up.
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