European Problem Solved? It's a Secret

[JPatrick]

.
CHICAGO (MarketWatch) — German Chancellor Angela Merkel and French President Nicolas Sarkozy said on Sunday they’ve reached an agreement to strengthen the European banks, but wouldn’t go into details, according to published reports.
Merkel, Sarkozy agree to strengthen Europe banks - MarketWatch

Well OK, whatever the plan is, the market futures took off like a rocket. If this turns out to be a "real" solution, and 3rd qrt earnings look decent, we could see a real melt up in our market.
And then again....My crystal ball is giving me trouble..
But, my dental implants are just fine....

 

[W2R]

How exciting! I hope you are right.

Not quite ready to celebrate yet, though... I want to know what the agreement is before I get too wild.

 

[MichaelB]

So, we have two European leaders saying "Regarding that problem that has no solution. Well, we have the solution, we just can't tell you what is it. It's a secret. Trust us."

Sounds good to me...

 

[GregLee]

So, we have two European leaders saying "Regarding that problem that has no solution. Well, we have the solution, we just can't tell you what is it. It's a secret. Trust us."

When the problem is lack of confidence, then the solution is to create trust. The secret doesn't matter. I predict the DJIA will advance 400 points on Monday.

 

[73ss454]

On Tuesday it'll some other crap we have to worry about, Yawn!

 

[Brett_Cameron]

On Tuesday it'll some other crap we have to worry about, Yawn!

I have been paying close attention to financial markets and articles for the last few months for the first time in my life and it is my opinion that the moves in the market both up and down are irrational for the most part and are driven by how <somebody?> feels about future prospects.

Your comment about other crap to worry about is so true. If it is not one thing it is another.

 

[MichaelB]

When the problem is lack of confidence, then the solution is to create trust. The secret doesn't matter. I predict the DJIA will advance 400 points on Monday.

Of course, if the problem is not lack of confidence but instead lack of solvency, the secret doesn't matter, and neither does Monday. The emperor has no clothes. There, or here.

 

[JPatrick]

I think the take away from the market jolt when the "secret" was announced, is the fact that the situation in Europe is weighing heavily on all world markets. If we can believe that indeed things are heading toward a resolution, a large percentage of our problems will be behind us. Next boogey man is past quarter earnings and (most important) 4th quarter projections that are positive. Put them all together and off we go.

That was really easy to say, but with thin trading expected tomorrow, and a few key technical, indicators at a tipping point, we could have a few nice days ahead of us.

 

[SecondCor521]

How exciting! I hope you are right.

Not quite ready to celebrate yet, though... I want to know what the agreement is before I get too wild.

Please don't use the "w" word

2Cor521

 

[bbbamI]

European Problem Solved? It's a Secret

Ok...I'll say it. I thought someone figured out how to keep their pants dry after they coughed/sneezed and were keeping it to themselves.

 

[traineeinvestor]

The emperor has no clothes. There, or here.

Given who we are talking about, that statement is disturbing on so many levels.

 

[W2R]

Please don't use the "w" word

2Cor521

Mum's the word!

 

[Telly]

European Problem Solved? It's a Secret

I've heard that it's an (Ice Blue) Secret... but the French say they don't need it

 

[Helen]

Please don't use the "w" word

I was thinking the exact same thing.

 

[Ed_The_Gypsy]

I love a train wreck.

 

[Bestwifeever]

European Problem Solved? It's a Secret

Ok...I'll say it. I thought someone figured out how to keep their pants dry after they coughed/sneezed and were keeping it to themselves.

 

[chinaco]

...
Well OK, whatever the plan is, the market futures took off like a rocket. ..

or.... the robots were unleashed and took off [-]high-frequency trading software[/-].

So far, the only result has been motion sickness.

 

[donheff]

it is my opinion that the moves in the market both up and down are irrational for the most part...

+1

When the problem is lack of confidence, then the solution is to create trust. The secret doesn't matter. I predict the DJIA will advance 400 points on Monday.

Hey, we could wager on this. Oh, that IS the market.

I'm betting it goes up a bit then comes back down as people start thinking, "Secrets? WTF?"

 

[TromboneAl]

The secret is that starting Tuesday, all Le Monopolie money will be legal tender.

 

[Lsbcal]

Listening to El-Ehrian (Pimco) and others, the solution is not just one thing but a set of things that have to be done over in Europe and elsewhere. It's unclear that all will be solved by the October G20 conference. Still I like the market direction today -- up a lot. More, more!

Here is one recent article: An unsettling trifecta for market contagion | Mohamed El-Erian

The fear of impending generalized dislocations — what the Managing Director of the IMF, Christine Lagarde, correctly labeled a “dangerous phase” — must now transition into three effective responses: immediate circuit breakers in Europe (what I call “very important and very, very urgent”); structural reforms in emerging economies, Europe and the US (“very important and very urgent”); and demand stimulus in emerging economies, Germany, and the US (“bridging mechanisms”).

And another BBC blog: BBC News - Eurozone's crisis countdown

 

[donheff]

I'm betting it goes up a bit then comes back down as people start thinking, "Secrets? WTF?"

Shows why I don't market time. Dow up 330. Oh well, maybe it will fall 400 tomorrow.

 

[JPatrick]

Shows why I don't market time. Dow up 330. Oh well, maybe it will fall 400 tomorrow.

On the plus side, the last 30 minutes was impressive.
We had an upside MACD crossover in all 3 averages. That will be a buy signal for some of those dirty rotten market timers.
On the negative side, the S&P is nearing significant resistance at 1200. Breaking above and holding would be very positive. A down day could portend yet another tumble.

The spotlight is now on earnings. The perfect upward storm would include (1) something real from the Europe deal (2) Good 4th qrt outlooks. (3) something positive out of Washington.
My bet is more upside, but not explosive.

 

[donheff]

The spotlight is now on earnings. The perfect upward storm would include (1) something real from the Europe deal (2) Good 4th qrt outlooks. (3) something positive out of Washington.
My bet is more upside, but not explosive.

I place my money on Europe. If they can do something solid over there I think our markets could pop. If perceptions are reality then some of those $trillions US corporations are sitting on could get broken loose. That could lead to an upbeat 2012 which would be great for our portfolios and have a huge political impact here.

Or, none of that may happen...

 

[samclem]

I think the European Secret will turn out to be an ingenious proposal allowing each EU country to set their own monetary policy to suit their unique national requirements. The countries will each issue something called "currency" and can print as much or as little as they chose. The market will set the value of each and lax fiscal discipline in one country won't impact other countries.

 

[Brat]

DH & I were on a road trip all last month, bumped into a couple of German tourists on 'holiday'. When I asked about their take on the European financial crisis one commented, "The economy of Greece vs the EU is akin to that of North Dakota vs the USA. Chump change. Relax."