Trichet's tricks

The overwhelming theme underneath today’s impressive market recovery was not discussed in 99% of the market commentary you’d come across this week and thus was a ‘shock and awe’ to most.  What we’re talking is the lead you had at DJIM…. “Now, the ECB’s meeting (Thurs.) comes into ‘big’ focus (exit strategy speak)….. only hope is eco’ figures this week turn some heads away from European perpherials and/or ECB provides some relief.”.

So, besides more v.good “economic data drivers” in China PMI, US ADP/ISM, GS raising GDP#’s, Germany retail, the market got some’ relief’ from the ECB in the way of ‘hints for surprises’ for Thursday morning on ‘exit strategy’ to contain the contagion.  Simply, the market mover was ECB’s “Trichet’s trick” hinting that the ECB’s bond purchase program could see significant expansion and warned markets not to underestimate Europe’s determination to resolve the eurozone crisis!.  Basically, ECB won’t be aggressive with policy exit strategy given the growing debt stress, but let’s just hope the market is not over the top (exaggerating) in thinking there will be something radical in Trichet’s one hour pre market massaging of the stressful markets and thus end up being disappointed.  If it’s only a soothing massage/delay of exit and not a specific policy change (big bond purchase) that may occur.  Simply, fingers crossed ECB live up to expectaions now.

In all, an impressive broad market move above the late November range.  Yesterday’s note on breaking 30 point late November range came sooner than thought, but we’ll definitely take the effort and hope the market builds momentum now as important eco’ data winds down.   As far as Shadowlist, it was quite funny seeing yesterday’s noted NCH’s APKT, KH, TFM on top again with gains of another >7% intraday.