All week the potential of big squeeze (up to 30 handles from 1266SP) was speculated, today revealed that you never know how far one may go as 30 handles were added just today!. The main drivers today were the same ones market reacted tentatively to yesterday, mainly the speculation of… a few proposals of assistance to Spain the sovereign. The importance of these ESM proposals with Spain is they are TARP like bank recaps. The story today was a compromise to bypass Spain’s balance sheet. Whatever the terms of this bailout (directly or indirectly to banks), all we need to know is its TARP. Also a notable item was …a step towards European ‘bank union’ was making the rounds. A dovish WSJ story was also timely and the “..wish ‘play’ now, a squeeze from oversold conditions off intervention speculation”,... was off and running.
The move was nice to see, but it was a lot of ES/ETF’s action as fast traders took over. This was discussed early in the week,..” If you’re a fast trader an oppy’ might arise in the next few days with many meetings and/or events ..”. Now we need to see better breadth, volume and hold SP 1300 by Friday’s close to possibly change the recent short term picture. Bernanke on the hill at 10am, Yellen strengthened the case for FED action.