Mr Market has again teased the equity doomer bears with a one day special..only to be followed by an almost complete rebound. With the daily cycles ticking back upward, it would seem the market will be breaking new index highs in the coming days..and weeks ahead.
For the equity bulls, it was just another typical rebound from a 'one day bear special'. We've seen this sort of event dozens of times across the last few years...and it is certainly no surprise to me.
Those watching the VIX...with it slipping into the 11s for the second consecutive day, should indeed come to realise that this market has ZERO fear about the near/mid term.
A brief update on two of the PIIGS
As I've been suggesting for many months, if even the ugly PIIGS of the EU are rallying..then it bodes well for the stronger economies/markets of the USA and Germany.
Both indexes are looking strong this month, and you can see there is very natural resistance, but that is around 10/15% higher in both cases. I hold to the original targets of 22500 and 12000 respectively.
If those occur..then we're surely looking at sp'1950/2050 by April/May..before a very significant correction of probably 17/22% across just 2-4 months.
There are a fair few things tomorrow. We have producer prices, Empire manu' report, but more importantly..the first Fed Beige book of the year (2pm). No doubt the market will jump on that if it sees a pleasing balance between 'economic growth' and 'no-taper'.
Once again there are two fed officials due to speak, one of which is Lockhart, whom the market used as an excuse on Monday to sell lower.
*there is VERY heavy QE-pomo of around $5bn...bears...should be frankly...terrified.
Goodnight from London
Video update from Oscar