Another day of great moves in these manodepressive markets. As we outlined yesterday “Our short term targets are approaching, and despite our negative views on the economy of those countries (Europe), we feel that the short term probabality of further declines is getting somewhat limited. If you have been short these markets as we advised, it is time to cover those shorts/try a small long at these extremely oversold levels.”
Today was the day of the “new smart shorts” to start sweating. With every newspaper joining the Spanish collapse theory the market had to bounce, despite all the negative news, including Paulson revealing his short Europe trade. Review the charts from yesterday (below), and trade accordingly.
Our Stoxx 50 chart from yesterday, nice bounce right on the support level.
All charts from yesterday here.