Plenty of Time for Bull

The market felt sick this morning. Asia fell heavily as Japan decided on an Aug 30 election and the ECFA talks sound like they’re going to be delayed. News of CIT potentially losing FDIC guarantees certainly didn’t help matters either. A number of the bigger banks came out saying they won’t accept California IOUs any longer and Lloyds informed us they were going to write down even more of the bad stuff. So overall, the news flow was less than positive. Even the talk last week of the Indian potash tender being settled c$600-$650 was quashed as Silvinit settled at $460. It did seem odd to have such high prices bandied about last week when last thing we had heard from the fertiliser companies was that demand was down significantly.

Nevertheless, this is nothing that some better figures from Philips (sales light, earnings better. Won’t be the last time we see that) and an upgrade from an influential banks analyst, can’t reverse. She’s been getting almost as much airtime on CNBC as David Faber’s new book…and it’s certainly doing the trick with Spoos and Estoxx up 2 and 3% from the lows respectively. Now, call me cynical, but I’m not sure Meredith Whitney would have has such an extensive opportunity to talk through her rationale had the note been downgrading the mighty house of GS. To be fair though, as of this AM, we’d been down in Europe, in 7 or the last 8 sessions so perhaps it’s not surprising to see a bounce, it just didn’t feel like it pre open.

And volumes just keep getting lighter and lighter. 48% says the UBS Voluminator today…and that’s 48% of not very much. One correlation constant is the inverse relationship between light volumes and heavy eyelids of market participants…and today shows no sign of being an exception. In fact, it almost looks like someone is resting their weary head on the buy button.