The ECB has announced liquidity measures resulting in a surge in early morning trading.
The Governing Council of the European Central Bank (ECB) has decided, in coordination with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three US dollar liquidity-providing operations with a maturity of approximately three months covering the end of the year. These operations will be conducted in addition to the ongoing weekly seven-day operations announced on 10 May 2010. These will all take the form of repurchase operations against eligible collateral and will be carried out as fixed rate tender procedures with full allotment. Further information on tender procedures can be found on the ECB's website. -Briefing.com
This should only add fuel to the buying we have seen over the past 3 trading days.
This week's bullishness contradicts my anticipation of further weakness. I expected some more selling before seeing the rise we have witnessed over the past 3 days. I continue to anticipate a downturn, but I am not looking to get short this market yet as bulls have the momentum. Sometimes it is best to sit and watch rather than force a trade. I will be patient and wait for the market to provide a better trading signal. We may continue to chop around in the current trading range until the FOMC meeting next week.
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