What does Santa tell you

Last night, early this morning, futures reached 1249 as compare to Monday low at 1195 or a 4.5% rally in just 1 trading day plus the extended hours. Is it you Santa?

On the news, the long awaited LTRO is out.  LTRO, stands for long term refinance operation, is actually ECB print 645b Euro and lend to 523 banks in a 3 year term. In the market, the bulls are having problems lifting the market above the resistance levels, while the bears still feel “confused”.

Here is an interview with John Taylor, who is founder, chairman and CEO of FX Concepts, the world's largest currency hedge fund. It is a very good interview. I summarized a few points below:

1. LTRO is QE in another form in Europe
2. It is a short term solution to a long term problem
3. This is a solvency crisis, not a liquidity crisis. Printing will not work. (You give a broke guy a credit card instead of a job)
4. Germany is doing so well that wreck Euro and EU
5. Greece, Spain and Italy to leave EU or Euro zone. “We are losing at least one, that is Greece in 2012”.
6. Global recession ahead in 2012. US will get a mild one.
7. EURO will go to 1.12 and possibly 1:1 (now trading around 1.31, a 17% drop)





Whatever Santa says, I still believe This is a solvency crisis, not a liquidity crisis. 
Short term bounce ahead with a possible target range at SPX 1280 to 1310. I am going to scalp in and out but I will not take long position in my portfolio.
Here is a chart from Daneric that explains what I think, extended wave 2 with double zigzag