The winning streak might have been halted, but the market acted just right showing the streak was not about QE outright speculation as many had thought. Instead, it’s mostly about Europe and the progress being made towards EU summit as noted coming into the day. Even the small pullbacks were bought up as shorts do not want to use their ammunition due to the upside risks coming out of Europe next week. (An extension of Operation twist for another 6 months and indication that more asset purchases would be considered if warranted by data was all the market received). Forget about the wildly speculative outright QE not happening, the actions were even less dovish than the reasonable expectations, yet market had a ho-hum attitude. Maybe that will change some overnight after over analysis, but if any selling does occur, it should viewed as a buying oppy as concluded heading into the trading day.
In all, day turned out to be about consolidation as subdued action followed the recent winning streak. Couldn't ask for anything better.
Flash PMI’s will likely be a non- event as there is little chance of a surprise pick- up. Market only wants to see stabilization signs at this point. A Finance ministers meeting in Europe is also on deck Thursday will likely drive intraday swings off breaking headlines, but the important meeting is still the 28-29 summit for investors.
Article originally appeared on Your Personal Trader (http://www.yourpersonaltrader.com/).
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