While the stock markets were largely held to a very narrow, tight, and boring range all day today, once again we see a high volume, down finish to the day.
As I mentioned before, this is not a good sign, especially on a Friday at the end of a bummer of week. This behavior, along with a high volume coming into bond ETFs (and a remarkably firm gold price), makes me think that there’s still a nasty surprise or two somewhere directly ahead.
While the good news is that the S&P 500 managed to finish slightly higher than the lows of the day, given the horrific market internals we saw yesterday (a TRIN over 6), I was fully expecting a more robust bounce today. We didn’t get it.
And the good news out of Europe: Germany had a whopping 2.2 percent increase in GDP on a quarter-over-quarter basis (more than 9% annualized!). This did not translate into a euro bounce but more euro weakness.
Perhaps it had something to do with the fact that there’s still some big trouble out there in the banking systems of more than a few eurozone countries, if these articles about ECB assistance to Spain and Ireland are any indication:
Spanish Banks Increase Net ECB Borrowing
August 13, 2010
MADRID—Spanish banks took up over 29% of the funds that were lent out by the European Central Bank in July as local lenders appealed for a record amount of liquidity, even as funding needs from banks in the whole of the euro-zone fell for a second month.
by singlespeak 
