Could some of last week's up move in world markets be explained by the following ?
ECB went on a shopping spree, supporting the global stock markets (atleast my theory, as part of the reason, along with fed policy last week).
I am not buying into the stock rally at these levels. Long term investors are probably sitting on cash for some time, and i see this as speculation driven monday, as value minded investors would have bought 1100 area already. It maybe a good couple of weeks ahead, to start researching on the long term stocks that i want to hold, so i am ready with my cherry picks, if market rally is confirmed. (MMI and NOK provided good example of this today).
The risk aversion shown by bond and gold market has not yet hit the stocks. I think, ECB can not keep up this kind of bond purchases (who is gonna fund it ?) If france and germany agree to fund southern europe this week, and if markets are satisfied with the amount of funding, then we will get confirmation of a sustained rally, within a week. I doubt if the citizens of these countries would keep quiet. I got confirmation for the "bullish move" when ES crossed above 1197 today, but it was not able to close the futures market today, above that level. I would like to wait out a day or two, to get confirmation, considering the important meeting in europe on tuesday. Gold has hit my first level (indicated as 1772 resistance in weekend email), and has to be watched carefully, given the state of turmoil in currencies market.
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