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Monday
Jan232012

Into the trading week, (Jan 23- )

One thing that is becoming clear after another week of gains is the rally is spreading its wings. The fact other asset classes such as USD/bonds are reacting to the downside indicates more money is believing in this Global rally. Another feature of the rally is its shield, any negative newsflow is shot back indicating resiliency. There is no reason why this market can’t go higher this month, a pause at resistance or even better a shallow pullback is all that stands in its way.   A lot has been made of the Greek PSI swap last week and a ‘supposed’ Monday deadline, but it hasn’t even been a noted catalyst here as the premise is been to look through the Eurozone clouds or be left behind.  A disorderly default after all that’s been done with Greece is almost an implausible risk for Europe at this point. A deal in some form will eventually take place.  Also, the ECB LTRO is likely considered to be a partial ‘contagion’ firewall.

The focus here will be on earnings as there will be no shortage of supply(reports).  Since notable financials and techs have reported, a broad picture is already known to the market.  Now, it becomes a single stock issue in the sense reports should not have broader implications on the market.  Still, a large supply of Industrial reports this week, but as any recent test of the eco’ data, it should also confirm the big picture.