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Problems? What Problems?
The Alzheimer's market continues in its ways, creating a new event focus each day.
Today it seems all concerns about the PIIGS are forgotten. The new focus of attention is the rejuvenated growth prospects for China. Oh, by the way, those renewed growth prospects are based on new Chinese economic data released overnight. For the 2nd quarter China's GDP grew by 9.5%, above estimates of 9.3% but down from the Q1 level of 9.7%. Also industrial production increased by 15.1%.
With these two data points, the experts and TV talking heads are now pronouncing that all is well in China and that we should abandon our concerns regarding an economic hard landing in China. So, give no more thought to previous talk of:
- A real estate bubble in China.
- Questionable quality of Chinese economic reporting.
- Inflation worries in China (It was all due to a pork shortage).
- Tightening monetary conditions, 5 rate hikes and counting.
Nope, all is well; China will lead the global economy higher. And, with no new bad news out of Europe in the past 3 hours, then everything must be fine there also. Right?
What an amazing market environment, dominated by momentum players such as the I.B.D. crowd, hedge funds, private equity pools, H.F.T. funds, computerized "seek-and-act" data miners, etc.
My gut instinct tells me that today's shift to a bullish tone could be unusually short-lived. I just can't shake the feeling that at any moment some unpleasant press release, news report or rumor could once again come out of Europe.
For now though, the trading day begins with a rather positive tone in which the Euro is once again climbing and the Dollar is once again falling. That puts the "Risk Trade Switch" into the "ON" position.
Glad I/we shifted at least somewhat to a net long position (in the PRO Options positions). I'll take it and smile as I hopefully log in some additional trading gains.
"Enjoy it while it lasts, 'cause it never does" - Lou Mannheim, Wall Street
Have a good one...
Curt B.
Options Manager: Daily Decision-PRO
S&P 500 - Last 3 Months
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