Monthly Archives: December 2011

There Will Be Debt

In Jan. of 2011 the POTUS announced 400B in budget cuts over 10 years through a variety of cuts and freezes. On Dec. 23 the debt cap was hit again and a 1T automatic adjustment was triggered.

 

 

 

 

 

 

This is a graph of 10 year Treasury yields from 1880. Clearly the huge amount of debt has led to an incredible rise in rates. WAIT? WHAT? The truth is that outside of the 70's (which started in the 60's) rates were common in the low single digits. Even the Fed Funds rate routinely traded sub-50 bp and no one called it "extraordinary" accommodation. The 70's experience has distorted 2 generation's views on rates. The Bond, back from brief extinction, is worshiped and hoarded. The government is doing its best to accommodate the love-fest. Nothing to see here, move along.

Euro Globex Trading Levels 30 Dec

Support & Resistance Levels for multiple time-frames on the Mar contract on the annotated charts below. (Click on graphs to enlarge. May need to click a few times to get to full size)

Technical Trading Charts & Levels for S&P, Euro, Pound, 10 Year Note & 30 Year Bond are in  Hooper's subscription portion of contrariancorner.com

Euro Mar '12 Currency Future

S&P Trading Levels 30 Dec

Support & Resistance Levels for multiple time-frames on the Mar '12 contract on the annotated charts below. (Click on graphs to enlarge. May need to click a few times to get to full size)

Technical Trading Charts & Levels for S&P, Euro, Pound, 10 Year Note & 30 Year Bond are in  Hooper's subscription portion of contrariancorner.com

S&P  Globex Future Mar '12 7:55 AM

 

S&P  Globex Future Mar '12

10 Year Treasury Trading Levels 30 Dec

Support & Resistance Levels for multiple time-frames on the Mar '12 contract on the annotated charts below. (Click on graphs to enlarge. May need to click a few times to get to full size)

Technical Trading Charts & Levels for S&P, Euro, Pound, 10 Year Note & 30 Year Bond are in  Hooper's subscription portion of contrariancorner.com

10 Year Treasury Note Mar '12

30 Year Treasury Trading Levels 30 Dec

Support & Resistance Levels for multiple time-frames on the Mar '12 contract on the annotated charts below. (Click on graphs to enlarge. May need to click a few times to get to full size)

Technical Trading Charts & Levels for S&P, Euro, Pound, 10 Year Note & 30 Year Bond are in  Hooper's subscription portion of contrariancorner.com

30 Year Treasury Bond

Germany DAX Trading Levels 30 Dec

Support & Resistance Levels for multiple time-frames on the Cash Index on the annotated charts below. (Click on graphs to enlarge. May need to click a few times to get to full size)

Technical Trading Charts & Levels for S&P, Euro, Pound, 10 Year Note & 30 Year Bond are in  Hooper's subscription portion of contrariancorner.com

Germany DAX  - (end of day look)  early close

 

Germany DAX

Into the Mystic

We were born before the wind

Also younger than the sun

Ere the bonnie boat was won

As we sailed into the mystic

Hark, now hear the sailors cry

Smell the sea and feel the sky

Let your soul and spirit fly- into the mystic Van Morrison Into the Mystic-Moondance

Much of the volatility, trepidation and chaos this year was perpetrated in the name of stability. The last few months have seen markets move reluctantly toward a harsher systemic reality. The problem with Central Bank monetary pornography is much of it is directed at masking that reality. Yesterday, Gerald O'Driscoll, a former regional Fed staffer, challenged publicly the legality of CB swap lines. Factually accurate, the comments got me thinking about risks in 2012.

Bank runs, liquidity droughts and collateral transactions (over unsecuritized/uncollateralized) are all symptoms of confidence crisis. Ours is not just a "faith based' financial system it's a "Blind Faith" based system. As the 70's power trio album cover attempted to show, the plane flies but few understand the mechanics behind it...its taken for granted. And so it goes in finance. Many may be encouraged by the destruction of financial alchemy but little is offered as replacement. 2011 has shown that year end marks are irrelevant when not put in the context of the journey to get there. In 2012, we move on into the mystic. The foggy uncharted void that comes when faith based structures die.

S&P Trading Levels 29 Dec

Support & Resistance Levels for multiple time-frames on the Mar '12 contract on the annotated charts below. (Click on graphs to enlarge. May need to click a few times to get to full size)

Technical Trading Charts & Levels for S&P, Euro, Pound, 10 Year Note & 30 Year Bond are in  Hooper's subscription portion of contrariancorner.com

S&P  Globex Future Mar '12

10 Year Treasury Trading Levels 29 Dec

Support & Resistance Levels for multiple time-frames on the Mar '12 contract on the annotated charts below. (Click on graphs to enlarge. May need to click a few times to get to full size)

Technical Trading Charts & Levels for S&P, Euro, Pound, 10 Year Note & 30 Year Bond are in  Hooper's subscription portion of contrariancorner.com

10 Year Treasury Note Mar '12