It’s really is all about Europe

Just in case there is any doubt left that the market is 100% about what is/will happen in Europe, take a look at today’s action in SPY, the SPDR’s S&P 500 index ETF. The market initially followed through on yesterday’s positive note with a nice gap open of about 2%. The news over the weekend was that Geitner had convinced the powers that be in Europe, that the only solution was the “bazooka solution” – a one time massive stimulus in the 2.5 – 4 trillion Euro range.

Yesterday, (Tuesday) in mid afternoon, the Financial Times reported that an agreement had not only NOT been reached, but there were major areas of disagreement. The markets gave up most of the day’s gain in about a two hours, before posting a slight rebound before close.

Chart from

That is two 2%+ moves in one trading day. And only on bits and pieces of rumored news! This market will either blast off, or fall like a lead balloon once we have real news on what, if anything the EU plans on doing with their members’ sovereign and unpayable debts.

I just want to caution, strong bets in this market are truly 50/50 propositions. No one knows what the outcome will be at this point – don’t be fooled by those pretending they do. Be careful, there really will be better times to make money.

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Charles H. Dow Award Winner 2008. The papers honored with this award have represented the richness and depth of technical analysis.


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