November 20, 2011
Weekly Market Outlook
By Keith Schneider
by Keith Schneider
The market ‘s recent rollercoaster ride that began with the current budget deficits, then quickly spiraled into the debt ceiling crisis, and culminated with a downgrade of US debt, continues to rear its ugly head. The Super Committee, whose job was to trim our budgetary fat and balance the books by late November, is deadlocked. The Damocles Sword of automatic spending cuts is upon us. We might even be forced to reduce our sparse military budget. Stupid smart bombs will be the consequence. Hence the stock market with great foresight (at least a week ahead) dropped 3-4 % this week. Add into the mix, Europe’s Sovereign debt issues which could result in a downgrade of already wounded US money center banks.
Of course a default by a Eurozone country or the demise of the Euro is not out of the question either. All is a recipe for a substantial selloff. Even gold and silver tanked this week as risk-off prevailed. The bankruptcy of MF Global’s, a major dealer in futures (FCM) added to the precious metal’s woes. Many big players are still looking for their money. Since the market low on October 4, we are at a most vulnerable position. Market leading stocks such as AAPL, BIDU, and AMZN broke down this week. With the exception of utilities, this is not a good looking market. When things look dicey, it’s smart to see where support lies.
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