Special Risk Capital Management LLC

A Tired Week . . . and A Tired Market June 17, 2011

I’m tired, after another week of this market showing more volatility than direction.  But at least the “witching hour” (options & futures expired on Friday) is behind us; maybe that will even things out next week.

I heard the announcer on the radio “crow” about the market snapping a 6 week losing streak this week, yeah the S&P 500 was up .04% (TGIF).  But  even a slight gain is better than a lose.  Market leadership (if one can call it that) is in defensive and dividend stocks, not a sign of a healthy market.  Accumulation (money flowing in) for the broad S&P 1500 is very light (8%), with Unchanged at 19% and those in Distribution (money flowing out) at 73%; about the same weakness since early June.  The Direction of Accum. & Distrib. is slowly improving; 58% improving / up, 5% unchanged and 37% getting worse.; again “hopeful” but similar to last week.

The financial gurus meet in Europe on Monday to decide if and how much money to loan Greece.  Yes, this could very well affect the US banks.  Not so much with direct loan exposure but by being the counter party to CDS (credit default swaps; i.e. default insurance).  Nobody knows who is obligated to who, for how much.  Sounds like a Lehman Brothers “here we go again” story.  Let’s hope not.

I’m still looking for a rally with high volume in some important sectors; technology, pharma., financials, consumer non-durables or something that signifies confidence.  For now, I don’t see it.  It’s painful to sit on Cash, but it’s more painful to lose it !

Have a good week, be careful & be patient.