A brief count update tonight. We are clearly in the sweet spot for a bullish reversal into [c] of Z. Much depends on the DAX finding support tomorrow morning in the 5760 range. Another major contributor would be a sharp short squeeze in Euro shorts, which there are in near record numbers. See my earlier post today for EUR/USD.
DAX DAILY
(at the 50 dma)
DAX 60 MIN
DAX 10 MIN
(Earlier projection lines still apply)
RUT DAILY
RUT 60 MIN
RUT 10 MIN
I'm too tired to opine prolifically on the possibilities for the latest clown show summit, but I do expect one more marvel of financial engineering and imagination to evolve, probably involving the IMF establishing a European Monetary Fund, which would then get funding from the NCB's. Some type of agreement on using the EFSF to recap banks would also not surprise, even though the EFSF is actually an UNFUNDED entity that relies on callable capital and funds itself through bond sales. (Bond sales that have not gone well lately, BTW). Beyond that, maybe some more hype about pulling the ESM implementation forward by a year. Just for grins, here is the capital subscription key for the ESM, as agreed in July of 2011. Remember, unlike the EFSF, the ESM is funded with actual hard money contributions. Pay attention to the amounts expected from the highlighted countries, particularly Italy, Spain and France. Not counting France, the highlighted countries are 35% of the total capital stock.
WACH AUF DEUTSCHLAND!!!
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