European Closing Thoughts 10/09/12

Since the Mid-Session Review has been published nothing really happened.

US markets opening signaled bulls' awakening, European markets regained the flat line: with half an hour to European cash close Stoxx50 fell 0.24% to 2,532.55, in the regional benchmarks' space German Dax rose 0.09% to 7,220.90,  Ftsemib fell 0.07% to 16,099.71 and the Spanish Ibex traded 0.35% lower to 7,854.90.

In US the DJIA traded along the flat line at 13,302.10, the S&P500 followed the same path at 1,437.69 while the tech Nasdaq fell 0.51% to 3,120.28.

Stocks declined in the morning as Greek Prime Minister Antonis Samaras meets officials from the nation's creditors after failing to secure agreement from coalition partners on spending cuts. Greece's Democratic Left leader Fotis Kouvelis, whose party is one of the three in the coalition government, said no decision had been made on spending cuts and that poorer citizens must be protected from austerity measures.

But attention in Europe was  largely focused on a decision to be rendered Wednesday by Germany's Constitutional Court regarding challenges to the country's participation in the European Stability Mechanism, or the ESM. On Thursday, the U.S. will take the spotlight when the Federal Reserve announces its latest policy decisions, with hopes running higher for another round of quantitative easing after weak labor-growth data announced last week.

The euro traded at 1.28$ versus the greenback, down from $1.2810 at the end of last week. The common currency extended its gain versus the dollar at the end of last week after a poor report on U.S. jobs triggered more speculation that the Federal Reserve would undertake further bond purchases to boost the largest global economy.

Gold futures eased today, trading 0.31% lower to 1675$ an ounce, while Crude traded along the flat line at 96.45$ a barrel.

It has been a sleepy day today, the question is still open:  Pocketing gains? or Increasing your long position?

The market has gone to full bull mode now as the Draghi put combines with the Bernanke put and the China put so we are back to full liquidity and the downside seems to have been truncated.

The question we need to answer is: “Is this the most bullish apex of this unstable equilibrium?? ”

I'm sorry I don't know the answer but I will think about it !

Have a great evening.

Originally posted at www.77sigmatrading.com