Equity markets still in a trading range with the path of least resistance on the upside. Europeans keep fumbling with debt issues but slowly seem to be dragging themselves to some kind of solution. Massive liquidity and top tier economic health leaves plenty of room for rallies given the pervasive bearish sentiment held by a large segment of the trading and non trading population.
Forty plus VIX, the great predictor of the last event, illustrates just how bearish the world has become given nearly all volatility currently represents downside bets.
The Fed and Treasury are taking no chances and have played overkill in providing anything stimulating as a prevention against Mr. Downside. Any blip lower in the Dow Jones now is a reason to plead with the rest of the world to keep on rescuing the wounded.
Things are not great out there for the many. Housing is a disaster. Job growth is nowhere in sight and creating jobs is going to be a challenge for years.
Governmental actions to stem financial trouble unfortunately has little to do creating economic growth in the US or anywhere else. Intervention is all about protecting assets. The notion that jobs will come if entities are saved is crap. If job growth happens, great, but these boys could really could care less.
Since the Lehman event, putting out every fire and saving everything but the middle class is the course of action. The best long term upside chance the latter may have is to let some it burn.
