November 03, 2011 at 09:32 AM EDT
Is the World Really Helpless and Hostage to Greece?
Thursday, November 3, 2011. 9.25 a.m. It’s incredible when you think about it. Greece is one of the smallest countries in the world. Its economy is #32 in size globally, with annual GDP of just $0.3 trillion, compared to $63 trillion for the world as a whole, $16.2 trillion for the European Union, $14.5 trillion [...]

Thursday, November 3, 2011. 9.25 a.m.

It’s incredible when you think about it.

Greece is one of the smallest countries in the world. Its economy is #32 in size globally, with annual GDP of just $0.3 trillion, compared to $63 trillion for the world as a whole, $16.2 trillion for the European Union, $14.5 trillion for the U.S., $6 trillion for China, $5.5 trillion for Japan, and so forth.

Yet tiny Greece has the entire world trembling in fear. Its decisions on how it will handle offers to bail it out of its debt crisis are threatening a banking and financial crisis in Europe that could throw the entire world into a serious recession.

If it were a military threat from such a tiny country, the overwhelming military strength of the rest of the world would make it a joke.

But its economic threat has all the world’s overwhelming wealth and power helpless to do anything about it?

Amazing.

Global Markets Continue Dancing Like Puppets  – On Greek Strings.

Global markets surged up last week when the latest eurozone rescue and bailout package was announced.

They then suffered a big two-day plunge Monday and Tuesday when Greece said it might back out and couldn’t say until it puts the plan to a public referendum in December.

Global markets then recovered yesterday when rumors spread that the referendum would not take place after all.

But last night it seemed the wait for a referendum was back on, and Asian markets closed down, with Dow futures down as much as 125 points overnight.

However, after Asian markets closed came word that Greece’s Prime Minister Papandreou was losing the already slim parliamentary support for his referendum idea amid mounting demands in Greece that he resign and let a coalition government take over and approve the bailout package without a referendum.

And in reaction this morning, markets in Europe are surging up, adding to yesterday’s gains, and pre-open indicators in the U.S. are pointing to a triple-digit gain in the U.S. again today.

Global markets are dancing like clown puppets to every twitch of the strings by Greece.

Technical Analysis Remains On Top Of the Situation.

Charts and technical indicators are not aware of what is going on with Greece. They simply measure what is happening in markets in regard to the direction of money flows, overbought/oversold conditions, support/resistance levels, momentum reversals, investor sentiment, etc. But by doing so they also measure the extent of the impact of surrounding conditions on markets.

And among other things they were showing gold to have found support again at its 30-week m.a.

110311a

And they showed the U.S. stock market to have been made short-term overbought by last week’s big spike up and due for a pullback from that overbought condition, which took place Monday and Tuesday.

110311b

But what’s next?

To read my weekend newspaper column ‘The Wall of Worry Is Still There But Not As Foreboding!’ click here!

Subscribers to Street Smart Report: In addition to the charts and signals in the ‘premium content’ area of the blog this morning, the regular ‘Mid-Week U.S. Market Signals and Recommendations’ update and a hotline are in the subscribers’ area of the Street Smart Report website from last evening.

Yesterday in the U.S. Market.

A partial recovery from the ugly decline of the previous two days.

The Dow closed up 178 points, or 1.5%. The S&P 500 closed up 1.6%. The NYSE Composite closed up 1.7%. The Nasdaq closed up 1.3%. The Nasdaq 100 closed up 0.9%. The Russell 2000 closed up 2.7%. The DJ Transportation Avg. closed up 1.3%. The DJ Utilities Avg closed up 1.6%.

Gold closed up $9 an ounce at $1,738.

Oil closed up $0.28 a barrel at $92.79.

The U.S. dollar etf UUP closed down 0.2%.

The U.S. Treasury bond etf TLT closed down 1.3%.

Yesterday in European Markets.

Markets in Europe also recovered some from their previous big two-day decline. London closed up 1.1%. The German DAX closed up 2.2%. France closed up 1.4%.

Asian Markets Were Mostly Down Last Night.

The DJ Asia-Pacific Index closed down 0.9% Sunday night.

The Japanese markets were closed for a holiday.

Among individual markets that were open:

Australia closed down 0.3%. China closed up 0.2%. Hong Kong closed down 2.5%. India closed up 0.1%. Indonesia closed down 1.5%. Malaysia closed down 0.7%. New Zealand closed up 0.1%. South Korea closed down 1.5%. Singapore closed down 0.9%. Taiwan closed down 1.8%. Thailand closed down 0.9%.

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Markets This Morning.

European markets are up strongly this morning. The London FTSE is up 1.3%. Germany’s DAX is up 3.4%. France’s CAC is up 3.1%.

Oil is up $1.35 a barrel at $93.86.

Gold is surging up $32 an ounce at $1,762 an ounce.

This morning in the U.S. Market:

This week is another important week for potential market-moving economic reports, including the ISM Mfg Index, the FOMC meeting announcement, Bernanke’s Press Conference after the FOMC meeting, and the Big One!, the Labor Department’s Employment Report for October. To see the full schedule of the week’s reports click here, and look at the left side of the page it takes you to.

Monday’s report was that the Fed’s Chicago area business barometer, the Chicago PMI, ticked down to 58.4 in October from 60.4 in September, but remained well above 50, the level that separates growth from contraction by its measurements. The Fed’s Dallas area business-activity index posted its first positive reading in six months, jumping from –14.4 in September to +2.3 in October.

On Tuesday it was that the ISM Mfg Index declined 0.8 to 50.8 in October. And that Construction Spending rose 0.2% in September. And automakers reported strong October auto sales, which were 7.5% higher than October of last year.

Yesterday the ADP jobs report showed that 110,000 new jobs were created in the private sector in October, and last month’s report that 91,000 jobs were created in September was revised up to 116,000. And in its FOMC announcement the Fed was a bit more optimistic that the economy is recovering from its summer slowdown, and in his press conference, Fed Chairman Bernanke said the Fed stands ready to provide more stimulus if it becomes needed.

This morning’s reports were that new weekly unemployment claims fell 9,000 last week, to 397,000. And Productivity of U.S. businesses was up 3.1% in the 3rd quarter .

Still, to come are Factory Orders and the ISM non-mfg Index, both of which will be released at 10 a.m.

But markets are still focused primarily on the European debt crisis.

Our Pre-Open Indicators:

Our pre-open indicators are now pointing to the Dow being up 120 points or so in the early going.

To read my weekend newspaper column ‘The Wall of Worry Is Still There But Not As Foreboding!’ click here!

Subscribers to Street Smart Report: In addition to the charts and signals in the ‘premium content’ area of the blog this morning, the regular ‘Mid-Week U.S. Market Signals and Recommendations’ update and a hotline are in the subscribers’ area of the Street Smart Report website from last evening.

Non-subscribers: How are you doing so far in 2011? We can help, and at very reasonable cost! Street Smart Report Online provides an 8-page newsletter every 3 weeks, an in-depth 6 page interim update every Wednesday on our intermediate-term signals and recommended holdings, an in-depth 4-page ‘Gold, Bonds, Dollar’ update every 2 weeks, and special reports and hotline updates as needed. Sectors, stocks, bonds, gold, short-sales, long-side and inverse etf’s and mutual funds. Highly regarded and in its 23nd year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

I’ll be back Thursday morning with the regular Thursday morning post, at 9:25 a.m. (This blog appears every Tuesday, Thursday, and Saturday morning!).

**** End of Today’s post*****

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