The European leaders finally showed some unity and decisiveness over the weekend, put on their best Poker face, and “went all in.”
The rescue package of almost $1 trillion is designed to bring stability to some of the troubled economies in the union. The markets took that as a positive and rallied sharply on Monday as the futures already indicated on Sunday night.
Very likely, a big part of that up move was short covering as many players did not believe that a consensus could be found in Europe let alone that an action package would be initiated this quickly. It now remains to be seen if there is more firepower left once all shorts have covered their positions.
Needless to say I held off liquidating some our positions whose sell stops were triggered Friday. The next few trading days should shed some more light on whether this was just a relief rally or if the major up trend will resume its course again.
The headlines are full of views and opinions about the crisis in Europe. For some different thoughts without the hype, please read Mish Shedlock’s “
Voices of Reason in Sea Of Insanity.”