The previous views have gone pretty well. I had been expecting a rally week in S&P and some strength in EURUSD (thinking two weeks ago that 1.21-12150 would be short-term bottom and couple of hundred points of upside was available, while expecting the SPX to rally from the lows towards a "lighten up"-target of 1360-1370)
As the first chart shows, SPX reversed quite nastily on Friday - after some very bad European news - and guess what - the Europe will still be there after only couple of hours. The first support area (1350-1355) is now near, but I have no strong ideas or views at the moment. A lot depends on the European response to Spain.Given that there is very little they can do now (see my Weekender: Euro Crisis for discussion), and that the rising channel's upside was not reached, I am beginning to believe that there will be a trend reversal - either by a direct break down, or some half-hearted bouncing around between "QE and credible Europe" and "everything is bad".
Everything is bad, and unless the expected policy response comes very soon, markets will sell off. But fears and thoughts are one thing and reality something else. Technically, buying a dip around 1353, targeting 1365 and looking at the newsflow and market reactions should make the picture clearer in few days.
Euro vs the dollar is also a mixed bag. In early Asian session the pair is trading below the earlier lows (1.2125 currently) and I would not touch the pair, as the levels are unclear, the direction depends on politics and the amounts and details of barrier- and regular option strikes near these levels is unknown. Just looking at the hourly chart shows that the Friday's negative performance was something to expect - just as I had warned in the morning.
Previously
on MoreLiver’s:
Weekender: Trading & Markets (trading, economics, regulation...)
Weekender: Euro Crisis (that never ends, until it’s over)
Weekender: Weekly Support (weekly reviews and previews)
Weekender: Best of The Week (from past week’s posts)
OLYMPICS
Goldman Sachs’ articles on Olympics
The
Olympics As A Winning FX Strategy – ZH
Would the Euro area Make a Medal-Winning Olympic Team? – ZH
Would the Euro area Make a Medal-Winning Olympic Team? – ZH
Longform’s Olympics Primer – Long
Form
Contributing editors Elon Green and Gretchen
Gavett, both of whom are more than a little excited for the Summer Games in
London, have pulled together 10 great stories about the Olympics, spanning
history, scandal and science … and what it’s like to drink with gymnastics
coach Béla Károlyi.
Crowd Psychology (Audio, 45min) – BBC
Collective behaviour and how it can be managed
is a burgeoning field of science, driven by the demands of music festivals,
sporting events and managing protests such as those seen across Britain last summer.
US DROUGHT / GLOBAL WARMING
Searching for Clues to Calamity – NYT
The problem is, no one knows if there is a
point at which a climate system shifts abruptly. But some scientists are now
bringing mathematical rigor to the tipping-point argument.
Dicing With The Climate – Krugman
/ NYT
In the long run, we are all extinct.
Global Warming's Terrifying New Math – Rolling
Stone
Three simple numbers that add up to global
catastrophe - and that make clear who the real enemy is
World braced for new food crisis – FT
The world is facing a new food crisis as the
worst US drought in more than 50 years pushes agricultural commodity prices to
record highs. Corn and soyabean prices surged to record highs on Thursday,
surpassing the peaks of the 2007-08 crisis that sparked food riots in more than
30 countries. Wheat prices are not yet at record levels but have rallied more
than 50 per cent in five weeks, exceeding prices reached in the wake of Russia’s 2010 export ban.
TECHNOLOGY / NET
Transcript: Schmidt and Thiel smackdown – Fortune
Eric Schmidt, chairman of Google, and Peter
Thiel, technology investor and entrepreneur, participated in a lively debate at
Fortune Brainstorm Tech in Aspen, CO, about the future of technology, and so
much more. Fortune's Adam Lashinsky moderated.
No Death, No Taxes (Nov 2011) – New
Yorker
Libertarian, futurist, billionaire: a profile
of Peter Thiel.
Why Did Reddit Succeed Where Digg Failed? – technology
review
Those in the know blame several factors,
especially confusing changes to the site's design.
Do-it-yourself apps: Make your own Angry Birds – The Economist
Homebrew apps have arrived
A Social Network Free of Ads – technology
review
The dominant social networks cater too much to
advertisers, says the man behind a Twitter-style network that users would pay
for.
PSYCHOLOGY
Latest psych and neuro news – The
British Psychological Society
The Special Issue Spotter – The
British Psychological Society
MILSECINT
The Pentagon's New Generation of Secret
Military Bases – Mother
Jones
How the Pentagon is quietly transforming its
overseas base empire and creating a dangerous new way of war.
Darpa Wants You to Be Its Hackathon Guinea Pig – Wired
If living in a college dorm for two months
while you’re prodded by government officials in a “short-fuse, crucible-style
environment” is your idea of summer fun, the Defense Advanced Research Projects
Agency would like a word with you.
OTHER
How a Medieval Friar Forever Changed Finance – View
/ BB
The system that generates these 21st-century
accounting figures -- the numbers that run our nations and corporations -- was
first codified by a Renaissance friar named Fra Luca Bartolomeo de Pacioli. He
was at one time more famous, as a mathematician, than his collaborator Leonardo
da Vinci.
Very Superstitious – Lapham’s
Quarterly
As the world was becoming more ordered and
codified via patriarchal religion and a burgeoning system of capitalism, magic
was seen as a threat because it circumvented these structures: it offered a
life outside the authority of the Church and the hierarchies it had carefully
cultivated.
Sherlock Holmes in Fairyland – Lapham’s
Quarterly
The detective, while often a dispeller of
superstition, was above all open-minded, willing to believe in what lies beyond
our common perception at the very moment it became necessary to do so. What was
impossible for Conan Doyle was that pure reason had covered the entire terrain
of things, overturned every stone.
“Is he coming? Is he? Oh God, I think he is.” – GQ
The story of the Norway massacre, as told by
the survivors.
Fear and Loathing on the Campaign Trail in ’72
(Jul 1973) – Rolling
Stone
By Hunter
S. Thompson.
Life after the Higgs – The
Economist
10 Reasons Countries Fall Apart – Farnam
Street
“States
don’t fail overnight. The seeds of of their destruction are sown deep within
their political institutions.”
How to Write a Bestselling Business Book – Businessweek
The Strange Neuroscience of Immortality – The
Chronicle
The scientific case for brain preservation and
mind uploading.
The Mysterious Disappearance of Peter Winston – The
New York Observer
How does one of the world’s top chess prodigies
just vanish from a New York street?
His Man in Macau: Inside the Investigation Into
Sheldon Adelson’s Empire – PBS
A decade ago gambling magnate and leading Republican donor Sheldon Adelson looked at a desolate spit of land in Macau and imagined a glittering strip of casinos, hotels and malls. Where competitors saw obstacles, including Macau’s hostility to outsiders and historic links to Chinese organized crime, Adelson envisaged a chance to make billions.
A decade ago gambling magnate and leading Republican donor Sheldon Adelson looked at a desolate spit of land in Macau and imagined a glittering strip of casinos, hotels and malls. Where competitors saw obstacles, including Macau’s hostility to outsiders and historic links to Chinese organized crime, Adelson envisaged a chance to make billions.
Top 10 trading commercials (and why) – Futures
Ever heard the sound of a nuclear bomb going
off? – Daily
Mail
Historian unveils one of the few surviving
audio recordings of blast from 1950's Nevada tests
What Would Winston Do – Reuters Magazine
The world is in crisis-mode because political
leaders refuse to lead, and “think” with their poll numbers. We could look to
the heavens for a miracle. Or we could look to Winston Churchill
Some thought Lisbon would become a drug
tourist haven, others predicted usage rates among youths to surge. Eleven years
later, it turns out they were both wrong.
The ‘Busy’ Trap – NYT
Busyness serves as a kind of existential
reassurance, a hedge against emptiness; obviously your life cannot possibly be
silly or trivial or meaningless if you are so busy, completely booked, in
demand every hour of the day.
Act Fast, but Not Necessarily First – HBR
Those of us who find time to step back and
think about the big picture, even for a few minutes, have a major advantage. If
every one else moves too quickly, we can win by going slow.