Decision Time In The Eurozone
Cam Hui | Jan 13, 2015 11:42PM ET
It's decision time in the eurozone, at a whole host of levels. From a technical viewpoint, the Euro STOXX 50 is forming a wedge and I am watching for the direction of the breakout.
The ECJ will render a decision today on the ECB`s OMT program, which could have an impact on the proposed QE program likely to be announced next week. This Marc Chandler . Needless to say, such a development would be hugely market bullish:
In Greece, the latest polls continue to show Syriza winning a plurality of votes at the January 25 election. Prime Minister Samaras’ New Democracy has not been able to close the 2-3 percentage point lead. Even with the 50 bonus seats given to the party that gets the most votes, it appears Syriza may not secure a majority in parliament. If it fails to do so after three days, the party with the second highest vote count will get a chance. New Democracy may be able to do so, avoiding another election.
I would note that the SPX is already forming a wedge formation similar to the Euro STOXX 50. Given the kinds of deflationary winds emanating from Europe, it may be eurozone developments that drive the next direction in the stock market, rather than Earnings Season in the US.
So instead of just watching US stocks, savvy investors and traders might be better served by watching Europe.
Disclosure: Cam Hui is a portfolio manager at Qwest Investment Fund Management Ltd. ("Qwest"). This article is prepared by Mr. Hui as an outside business activity. As such, Qwest does not review or approve materials presented herein. The opinions and any recommendations expressed in this blog are those of the author and do not reflect the opinions or recommendations of Qwest.
None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions. Past performance is not indicative of future results. Either Qwest or Mr. Hui may hold or control long or short positions in the securities or instruments mentioned.
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