For the US Stock Markets, the near term trend and bias for the week is down. All the indicators are oversold and needs correction. We need to watch 1290 level of SPX and if that is broken, we might visit 1250 or lower before another rally. Moreover there are huge TBill settlement this week, draining the liquidity.
The Euro opened well below its last week’s close and is at 1.4209. Looks like it wants to go below. The fear of contagion is increasing. Rates for the Italy 10 year bonds have crossed 5 % and Italian Stock Market has sold off last week. The talking heads of EU have convened an emergency meeting for tomorrow but as Mr. “When it gets serious, you have to lie” Juncker says, the meeting is just a coordination meeting. I expect Euro to reach 1.35 level this week. How that plays out with SPX is to be seen.
GS and other black box traders have been selling Italian Banks in Europe for the last two weeks while pumping the stock markets in USA. This week, expect the opposite to happen with CNBC and their like to scare retail investors on the back of high selling. If this plays out as expected, it will be time to buy. But we need some selling before that.
NEWS JUST CAME IN:
Italy may ban naked short selling as early as to night. There is already panic in European markets.
NEWS JUST CAME IN:
Italy may ban naked short selling as early as to night. There is already panic in European markets.
