NUTCRACKER!

By Global Macro Monitor

Wow! That was some move.

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Take a look at FAZ, the triple short financial, down 17.5 percent on the day! Every trader and their mother were getting long that after last night’s close on the S&P downgrade of the banks.

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You can take on of the Fed, but you can’t fight the Fed, the ECB, the Bank of Japan, the Swiss National Bank, the Bank of England, and the Bank of Canada. And, yes, the People’s Bank of China. We also doubt Frau Merkel will leave them all out there to hang. We suspect the EU is cooking up something that could surprise the market. We cry uncle.

Even after the big moves of the last couple of days, the S&P 500 is only back to where it was just a few weeks ago. We’re bearish on the macro picture, but who isn’t? More important, who is fully invested? Remember, the S&P500 rallied 20 percent in 17 trading days in October with all the same ugly macro bears.

It looks like Santa Claus is coming to town. Maybe we get a little consolidation over the next few days and then the next test for the S&P is 1257, the breakeven for the year, 1265.89, the 200-day moving average, and then the October 27 high of 1292.66. Always can be wrong and always with a stop.

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