MidSession Review 21/09/12

Let's start with our Morning Meeting last sentence:

An hint: more often than not, the market will have a positive day on those quadruple witching days.

Looking to the market: these guys at 77SigmaTrading are quite good at making prediction…  Sorry, we do not make prediction but we think in probability terms.

With September derivatives on European indexes expired, markets were freed from “witches”.

The Stoxx50 traded 0.69% higher to 2,570.58, the German Dax rose 0.88%, the Italian Ftsemib gained 1.15% to 16,012.76 and the Spanish Ibex led gainers up 1.33% to 8,128.80.

The Spanish benchmark skyrocketed on the news that: Spain is considering freezing pensions and speeding up a planned rise in the retirement age as it races to cut spending and meet conditions of an expected international sovereign aid package.

As we said in the previous posts the market wants Spain to ask for a full bailout, Why? Because it's the cheapest way to check ECB's cards. The hardest and costly one would be to send Spanish yields to unsustainable levels.

The effect of the Spanish news was supported by Minneapolis Fed President Narayana Kocherlakota, who reversing his view, that pushing too hard to get Americans back to work risks inflation, suggested  the Fed should keep rates low until the jobless rate drops to 5.5 percent.

As a result of this comment: Nymex crude-oil futures rose 64 cents to $93.06 a barrel in electronic trade. Gold futures gained $6.10 to $1,776.30 an ounce. The dollar index  fell 0.4% to 79.069. The common currency advanced 0.39% to $1.3032, while the dollar was steady versus the Japanese yen  at ¥78.23.

It's time for the US market to face its witches..

Originally posted at www.77sigmatrading.com