Headlines out of Europe act as puppet masters over traders. Yesterday began with selling as markets reacted to talk that this weekend's EU summit might be delayed. As the the ES ticked down towards the lower 1190s support, more news came out of Europe suggesting that Sarkozy and Merkel would meet on Saturday in Brussels to resume talks about a European bailout plan. The S&P 500 reacted by rallying 20+ points off the lows. Futures are up again this morning as headlines report that Germany and France now agree on key points of the European Debt plan ahead of next weeks EU summit.
The European Debt talks are making for some great trading opportunities, but I don't know that they are doing anything to solve the banking crisis and debt concern in Europe. I expect continued choppy action and knee-jerk reactions to news out of Europe, but I also continue to expect higher highs ahead. I like buying the dips. Next target on the ES remains at 1237 and I expect upper 1250s to follow.
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