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Adam Hamilton's latest essay


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Hamilton's essays have been a great addition to the reading library, and I believe I have Moore to thank for that (if not, thank you to whomever began posting them). Hamilton's latest missive is quite bullish on the market making a new leg upward based on higher highs, higher lows, and the market reaching its 200dma. He indicates his projection takes into account the European situation, however, the following quote leaves me concerned:


And they will.  Just like our government in Washington, the European governments are way too big and bloated and living far beyond their means.  The global financial markets are forcing them, through the mechanism of higher borrowing costs, to get their acts together.  Europe’s underlying economy continues to expand, as Europeans still get up every day to go to work and have no choice but to continue buying things to provide for their families.  Smaller governments over there would actually be a huge boon.


The underlying economy in fact is NOT expanding, but rather contracting, and the Europeans just concluded yet another "Euro-saving" summit that is long on promises, short on substance, and does ABSOLUTELY NOTHING to resolve the Eurozone solvency problem caused by a monetary union with no fiscal union and exacerbated by forced austerity measures. No bazooka was announced, and the european bond markets have demonstrated time and again they are not going to wait around. The Europeans continue to lag the market, and I don't see what has changed.


All that to say, it will be very interesting to see how Hamilton's projection plays out.

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