Greg Guenthner

Last-minute bailout…

Where have I heard this one before?

Eleventh-hour deals are quickly becoming the norm these days. Cyprus has become the latest member of the just-in-time club, notching a deal late last night in Brussels to grab its $13 billion bank bailout.

The third-smallest eurozone economy didn’t come out squeaky clean, though. There’s still the matter of shuttering its second-largest bank. And anyone with an account larger than 100,000 euro is taking it on the chin.

Of course, these new developments have triggered a huge relief rally for the U.S. markets, which plummeted last week as the Cyprus banking crisis began to unravel.

Wait a just a minute — that’s not what happened at all…

In the real world, the S&P barely budged last week, finishing Friday afternoon down less than a quarter of a percent since the weeklong crisis began. This morning, S&P futures are up four points. That’s it. Four measly points. Hardly worth noting, really. In fact, the reaction to the entire Cyprus situation here in the U.S. has been completely and utterly mundane.

If I could somehow black out your access to charts or any other market information, you probably would have thought that the situation in Cyprus had brought the market to its knees last week. The financial media was all over this one (again) with its manic reporting. Every headline and blog post just one week ago breathlessly predicted doom and turmoil. This morning, they flip the switch to talk of all-time highs again:

Reuters Headline

The financial media has you strapped to some sort of twisted carnival ride, yanking at whatever vulnerable emotion happens to bubble to the surface any given moment. The fiscal cliff reporting just a couple of months ago was no different. Same with sequestration. Now it’s Europe again.

You can’t build a solid investment plan off these sensational headlines. There’s no sense in puking your guts out on the media’s spinning wheel of terror. When you buy and sell based on the crisis du jour, you’ll find nothing but pain and losses…

Greg Guenthner
for The Daily Reckoning

Greg Guenthner

Greg Guenthner, CMT, is the editor of the Daily Reckoning’s Rude Awakening. Greg is a member of the Market Technicians Association and holds the Chartered Market Technician designation.

Recent Articles

5 Min. Forecast
How to Profit On the Back of an “Activist Investor”

Dave Gonigam

Since the invention of the "shareholder rights plan" (i.e. the "poison pill"), most companies are relatively immune to hostile takeovers. But according to Dave Gonigam that could all change thanks to one activist investor. And if you're savvy enough, you may just be able to follow his lead for big gains. Read on...


Extra!
Why Americans Shouldn’t Worry About Income Inequality

Jim Mosquera

As the markets have continued to rally over the last several years, more and more people have touted the problem of "income inequality" in the US. But as Jim Mosquera explains, this perceived problem will likely sort itself out with the arrival of one specific market event. Read on...


One ETF to Play Asymmetric Warfare

Addison Wiggin

Almost one year ago, substation telephone cables were maliciously cut in San Jose, CA. In 20 minutes, 17 transformers were knocked out. A year on, similar threats have cropped up. Today, Addison Wiggin explains why these threats are so serious for the safety of the global economy... and shows you one way to play it...


What Small-Caps are Saying About the Current “Bubble”

Greg Guenthner

The big problem with declaring bubbles is that it really does you no good. Unless you're attempting to measure and time market moves, you're also blowing hot air. But if you keep watch for negative divergences, you have a much better shot at figuring out big market moves than the latest bubble-busters. Greg Guenthner explains...


A Simple Strategy for Investing in the US Energy Boom

Byron King

Too often investments are made in a vacuum. But as Byron King demonstrates, the global economic crash... easy money... and technological advancements are all interdependent. In particular, that connection has changed the investment calculus in the resource market. Read on to learn how...


How Gold Will Respond to Declining Discovery

Henry Bonner

Oil isn't the only resource to experience "peaks." Due to a major contraction in gold exploration over the past few years, the mining sector is no longer mining gold at its replacement rate. In other words, the amount of gold above ground is running out. And according to Henry Bonner, it will get worse before it gets better...