Markets have continued up and then continued up higher. The bullish move in global markets is based largely on information that the European Union plans to pump liquidity into the banking system in efforts to avoid a Greek default and prevent contagion. The Euro moved higher as confidence in the Eurozone increased and the dollar sold off as it was no-longer the defacto safe haven bet.
This morning, US markets are seeing some selling following comments out of Germany that European Union leaders will not provide the complete fix to the Euro-area debt crisis. The plan for the EU is to write down Greek bonds by up to 50%, make sure the Banks have capital to continue lending and to strengthen the EFSF in terms of its ability to lend. There is still no new publicly available details as to how this will be accomplished.
The negativity this morning is mostly in reaction to the less than optimistic comments out of Germany. I do not expect selling to continue for long however, and currently I see dips as buying opportunities. Obviously any negative news out of Europe will influence selling, but aside from those occasional news bites, I see the market moving higher into next weekend. E-mini S&P 500 futures (ES) broke above the previous range high of 1224 to trade above 1230 in the overnight session. Once the market finds support, look for the next move up to find resistance around 1237-1240. I will begin to consider shorts if/when the ES manages to trade up around 1270. We'll see what the market timing is when this happens and what news comes out of Europe at that time.
Some thoughts behind my bullish sentiment: The charts are technically bullish in the short-term (though we may see a small decline off the upper range resistance before continuing up). European finance leaders will continue to meet to solidify a plan to terminate the sovereign debt crisis and they have every motivation to give the market participants what they want to hear. The consensus view is that failing to agree on a strategy (to put it simply, provide liquidity to the Euro banks) will endanger the global economy. Political leaders will do their best to prevent this from happening. This is why I am bullish right now.
Subscribe to:
Post Comments (Atom)
Potential targets to get long in anticipation of making a new high in the market:
ReplyDelete1st long target: 1192 ES
If the low 1190s (ES) do not hold as support. The ES could makes its way to the 1164-1174 range. If ES trades into that range, I will be looking to get long with confidence...
Nice Rally off the current intra-day low of 1194.50 ES. This may be the low of the day, 2.5 points above my initial target. Considering long now at 1197-1198. If that doesn't hold as support, then I expect my original target of 1192 will be hit...
ReplyDeleteNo long for me now... price action has not given a confirmation to go long with good enough odds of success... Price may rally into the close, but there is not a good enough edge to take the trade for me... Waiting for a lower price.
ReplyDeleteI think we may get a pierce below 1190 ES before it will be worth jumping in long. Would be an aggressive entry to get long here at the close. We'll see how the overnight session goes.
ReplyDelete