The Damage Is Done. Market Senses Danger and the Risk Level Is Elevated. SPY Below 125 – Stay Short


Yesterday, the market tanked as interest rates in Italy skyrocketed. Margin requirements on Italian debt were raised and that added fuel to the fire. They have reached the point of no return and we should expect them to climb higher in coming months. Italy has the seventh largest economy in the world and it is “too big to bail and too big to fail”. Prime Minister Berlusconi said he would resign once a new budget has been passed. Unfortunately, they have not finalized the austerity plan so there is nothing to sign. Italians have not decided on a replacement and politicians …

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