If you have been following this site then last week was in NO WAY surprise for you. You should have expected the market decline as our history teacher (BPNYA Index) guided us quite well, Isn't it!!!
Last week it seemed like market would rally based on the news out of Euro-zone but it was not enough. Euro debt crisis kept the pressure on the market. Every time market tried to make a move higher, it was not successful. Next week is very crucial as 6 member US Congress committee needs to come up with $1.2 trillion in order to avoid compulsory massive spending cuts across the board (including defense) as outlined in August. But to avoid any US debt ratings cut (by ratings agencies) they have to probably come up with much more than just $1.2 trillion. As of now, no progress is made by the committee and both parties could not agree on any compromising solution to the problem. One would think that by now they would understand the gravity of the situation but don't forget these are politicians and they always play their game.... So what's in store for the markets!!!
As expected, last week market had a bumpy ride as all the Euro-zone drama was unfolding. Initially, it all started with Greece default concerns and then the spotlight shifted to Italy debt crisis. As we write this, the news is that Italy passed austerity package and PM resigns so that new government can be formed. Most likely markets would take this as positive news and rally will resume this week. But for how long and how far!!!
Last week of October, market staged a massive rally with the assumption that Euro-zone crisis was resolved for now. But before the dust could settle, Greece threw another curve ball and we were hit by a roadblock. Now everyone in Euro-zone is scrambling and trying to convince Greece to accept the bailout. Isn't this frustrating and at the same time ridiculous!!!
What is NYUD?
What is BPNYA?