Well, not being filled on EUR/USD short last night is upsetting, to say the least. But I will be the first to tell you that it happens all the time. Traders miss the moves, and the ones who tell you they got every move up and down are plain out lying.
So we have high-ranking ECB resignation and a possible Greek default at the same time (per rumors). Not sure I am buying this just yet, gold is up just $13.
I think if I was Trichet and Bernanke in Marseilles right now, I would be in crisis talks with all G7 members into the wee hours of the night to hammer out a total banking system "backstop" in the case of sovereign default. I would not be surprised if they already have the mechanism in place (per my earlier view that they designed it during their meeting in Jackson Hole). I said EFSF has to become TARP/TALF and go towards recapitalization of banks. It is a no-brainer!! We get to find out soon if that is the case. Somebody somewhere will leak this news to calm the markets down. Lehman was let to unwind uncontrolled, I suspect they learned their lesson.
Do not try to catch any falling knives here. SPX is below 1165 gap fill. I hoped that we would close above that level today. We still have 3.5 hours left. I am not very bullish here any more, and neutral at best. VIX is above 40. All long bets are off, I mean ALL. No need to be a hero here, absolutely no reason. Just relax, step back, and observe the action. Technicals will tell you what will happen. News will tailor to charts. Preserve your hard-earned capital. DXY runner is the only thing I would keep here, what a freight train.
Helmets on!!!
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