Crackpot Market

93 points down in less than 3 trading days.  66 points up in 36 hours.  Something is really unstable here.  This is a mini fall of 2008 trading.  There has been nothing really substantial coming out of the EU to stop their crisis.  They probably need a TARP or a bond buying spree like the Fed did in 2009.  But all we've gotten are little band aids while the crisis gains momentum.  It is a bigger problem than in May 2010 but we are much higher on S&P.  But Europe is much lower than May 2010.  So are the crowd favorites, Brazil and China.  Something is not adding up.  QE2 did a lot to distort dollar based assets higher, and it has just left us with bloated commodity prices.  Oil at $116 even during a financial crisis!  (WTI is irrelevant now, the global oil price is Brent).  Killing the consumer with high oil prices via QE2 and bailing them out with payroll tax cuts and jobless benefits forever.

I don't see a sustained rally until Europe comes up with their version of Ben and Hank's  bazookas.  And that probably doesn't happen until markets really panic.  Before then, you will see all sharp rallies get faded and eventually we will test 1100 and break it.  This zone around 1200 is a place to sell.