Last night, there was a widely-heralded interview with Ben Bernanke in which he assured everyone that (a) the recession would wrap up this year in all likelihood, which means the economic bottom is just months away; (b) the banks were going to be fine and dandy. The markets reaction was……
This comes almost exactly one year after, on March 8, 2008 (when the S&P was at 1275) Bernanke said: ""At the Federal Reserve, we will continue to forcefully deploy all the
tools at our disposal as long as necessary to support the restoration
of financial stability and the resumption of healthy economic growth."
I find it puzzling that, time and again, such governmental reassurances are embraced as gospel sources of comfort.
In any event, I still see the area just below 800 as a huge brick wall through which the S&P will have tremendous trouble getting past. I got stopped out of the /ES last night at 755 (and this time, I certainly didn't regret it……….) and re-entered a smaller position at 762. I will continue to tilt at this windmill until the /ES gives up the ghost, or until it's clear that 800 is going to be conquered after all.
