MidSession Review: No room for bad news.

Today European shares and the euro led a fresh push to risky assets as speculations is mounting that Spain is getting ready to ask for a bailout.

The WSJ report that we highlighted in the today's Morning Meeting is the main focus, but if the news sparkled the move, the German Zew gave a boost:

German ZEW Survey – Economic Sentiment rose to -11.5 points in October, from -18.2 points registered the previous month, ZEW reported on Tuesday. Analysts expected less increase to -15 points. Zew Current Situation slid to 10 points in October, from 12.6 points in September and below forecasts of a drop to 11.3 points.

A cold shower came from the European economic sentiment, which fell short of expectations at -1.4 from -1.1 expected but above the -3.8 recorded at a previous reading.

There is no room for bad news today, at least this is the way it looks like this morning but remember anything can happen in the market, the Stoxx50 rose 0.71% to 2,502.80, the German Dax traded higher 0.55% to 7,300.84, the Spanish Ibex led the gainers up 1.13% to 7,765.20; Italian Ftsemib was the least involved in today's run, up 0.28% to 15,633.91.

On the government bond side: yields on 10-year Spanish government bonds rose 1.4 bps to 5.839 after falling 4 basis points to 5.75% in early trading. What's going on here?? German yield rose too 2.3 bps to 1.494 percent. The move can be related to the 1.25 billion euros of 13 week Treasury bills auctioned by the Greek government a day after the Prime Minister Antonis Samaras said at a conference in Athens late yesterday that Greece will soon get its next tranche of bailout.

The Euro rose 0.42% versus the greenback to 1.3004$, ahead of a European summit on Thursday which is expected to give signals that may affect expectations that Spain will ask for bailout in the coming weeks and that Greece will be given the support to allow to stay in the Euro area.

For what it may concern the Spanish timetable: a report from a major financial institution today points out that a bailout request will follow the 21 October Galicia elections.

A weaker dollar sent the Gold 0.16% higher to 1,749.40$ an ounce, while the Oil (WTI) was unable to keep the flat line, falling 0.05% to 91.80$ a barrel.

The European morning session has been the appetizer in today's menu, the main course is made by Goldman, CocaCola, IBM, J&J to report earnings.

Let's have a look at some of the statistics: as of Monday, of the 34 S&P 500 index companies that have reported third-quarter results so far, nearly 59% have beaten earnings estimates, according to Thomson Reuters. Almost 18% have reported earnings in line with expectations and roughly 24% have come in below expectations.

At this point my only advice is to not react to the news but to follow your plan religiously.

Originally posted at www.77sigmatrading.com