1. The situation is as expected with a disgusting charade in DC and the endgame is quite clear as the debt limit will be raised but not in the smooth way Obama wants it til after the elections. A downgrade of USA is therefor a sure thing only a matter of weeks and that will have a severe effect (see SPX update) as the reserve currency status will be erased. On the other hand the rising Yen is another joke of the current insane markets as Japan is in best case a single A but right now the housewives trading the higher yield countries versus a short Yen are getting screwed I assume as they accounted for almost 50 % of Yen Forex trading at some point. The retail or smaller trader short position has been squared and big traders are big time long for now.
Apple is testing the 400 level as the stock is basically cheap assuming S. Jobs lives for ever but that is rather a serious risk. For now a break above would trigger a serious follow through for 10% which might help the NDX going another 200 points up but for now I assume the NDX might be in strong resistance in the 2425-50 area.
Slowly details of the shape of Boehner’s two-step plan are emerging:
- BOEHNER’S FIRST STEP WOULD BOOST DEBT LIMIT INTO FEBRUARY
- BOEHNER PLAN SAID TO SEEK DEBT BOOSTS OF $1 TLN AND $1.6 TLN
- BOEHNER’S PLAN WOULD HAVE COMMITTEE IDENTIFY SPENDING CUTS
- BOEHNER’S PLAN REQUIRES HOUSE AND SENATE TO VOTE ON BALANCED BUDGET AMENDMENT BETWEEN OCTOBER AND THE END OF 2011