So - the much awaited loot of honest tax payers' money continues. BoE announces an asset purchase program and outgoing Jean-Claude Trichet announces that for a 12-13 month period, troubled banks will get as much help as possible to stave off the troubles as much as possible. This is exactly what the bankers wanted and managed to get it too - all that was needed was to trigger sell buttons en masse repeatedly and the central banks succumbed. As usual, known for things BIG, now President Obama, not wanting to be left behind urges the stakeholders to approve his 400+ billion dollar scheme [TARP was too little, Big Ben doing 2 rounds of QE was less - and now that Europe has joined the party for bailout, the US wants to make sure they don't lose the numero uno position - the numero uno position of beggars one must remember!]
So where does this lead too?
So far, things have not changed at all as far as stock markets of Europe are concerned. FTSE has support in the 4900 zone and till that holds, counter-trend rallies to 5200-5400 will keep coming. Those bullish on FTSE should only get some cheer if it stages 2 consecutive closes above 5550
For SMI and DAX, the 5000-5100 zone represents good support and to the extent these hold, we will see counter-trend bounces to 5600 [or perhaps 1 poke to 5700 levels as well]
As far as CAC40 and DAX are concerned - their targets are set firmly in place - 50% drop from the 2011 highs. CAC40 has completed half the journey. the remaining should be covered in another 6 to 8 months.
Dow still will continue to take support in the 10250-10500 levels and bounce back for a couple of instances. 2 consecutive closes above 11450 will open Dow for retest of 11875-12k levels on the upside. Transport and Banks have already confirmed the weakness. Retail is showing some positive divergence and if the earnings even come marginally close to the already revised analysts' expectations of less than 1 dollar EPS [in banking stocks] and the outlook looks better for banks based on recapitalization due to monetary liquidity, there may be some more brightness on Dow before it sinks.
So where does this lead too?
So far, things have not changed at all as far as stock markets of Europe are concerned. FTSE has support in the 4900 zone and till that holds, counter-trend rallies to 5200-5400 will keep coming. Those bullish on FTSE should only get some cheer if it stages 2 consecutive closes above 5550
For SMI and DAX, the 5000-5100 zone represents good support and to the extent these hold, we will see counter-trend bounces to 5600 [or perhaps 1 poke to 5700 levels as well]
As far as CAC40 and DAX are concerned - their targets are set firmly in place - 50% drop from the 2011 highs. CAC40 has completed half the journey. the remaining should be covered in another 6 to 8 months.
Dow still will continue to take support in the 10250-10500 levels and bounce back for a couple of instances. 2 consecutive closes above 11450 will open Dow for retest of 11875-12k levels on the upside. Transport and Banks have already confirmed the weakness. Retail is showing some positive divergence and if the earnings even come marginally close to the already revised analysts' expectations of less than 1 dollar EPS [in banking stocks] and the outlook looks better for banks based on recapitalization due to monetary liquidity, there may be some more brightness on Dow before it sinks.
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