Wednesday, March 24, 2010

Some PIIGS in the Poke


A poke is a sack or bag. It has a French origin as 'poque' and, like several other French words, its a diminutive is formed by adding 'ette' or 'et' - hence 'pocket' began life with the meaning 'small bag'. Poke is still in use in several English-speaking countries, notably Scotland and USA, and describes just the sort of bag that would be useful for carrying a piglet to market.

The poke is where two of the PIIGS are right now - Greece, Portugal and Spain. All three have had death crosses, the latter two just last week, right in time for Portugal's debt downgrade.

Death cross (black cross) - opposite of the golden cross when the 50-day average crosses under the 200-day.

Yeah, the markets shrugged off Greece and its death cross in January. Greece was a tiny market, they said. But the contagion is now spreading, isn't it? Italy is just a few days from its own death cross and Italy is no small market.

No, it's not the UK but guess what has been linked to Portugal? That's right, the UK. MarketWatch - Portugal and the UK-joined-at-hip-with-budget-woes

Where there is smoke there is fire and I smell BAACON (OK a bad attempt to say fried sliced PIIGS).

Can the US market move higher? You betcha, Sarah. The trend is still up.

I still say that when it finally turns, it will be a house of cards a-tumbling. Do you have any other explanation for the price of US government bonds absolutely tanking today?


paulocuana said...

Ouch! I've been mostly in bonds over the past year and I've done well but today was something else.

Let's see, more than a third of your annual income in long Treasuries was lost today, down about 1.5%.

A day like this in bonds used to really trip up stocks. Oh well, maybe tomorrow.

Paul O'Cuana

Quick Takes Pro said...

See my MarketWatch column on April 1.