Richard Rhodes | Dec 19, 2012 02:45PM ET
STOCKS:
The European debt contagion has been “kicked down the road” as Spanish and Italian short-and-long term bond yields have moderated recently given the ECB “plan” to buy bonds of up to 3-years in maturity...but only if asked; and only if conditionality is imposed upon those asking. The Fed has also changed its game from “inflation-fighting” to “unemployment fighting” with the new move to QE-4; and with any war — they will go further and farther than anyone believes in printing money to achieve their ends.
STRATEGY: The S&P 500 remains above the 160-wma long-term support level at 1257. The much followed 200-dma support level stands at 1388, and was regained in weekly key bullish reversal fashoin. Collectively, this stands bullish for a test and likely brekaout above the recent September highs at 1475. We are long of gold...and waiting, energy and transports at this juncture.
In Europe, the major bourses are higher very modestly – up +0.4% or a bit more; Italy and Spain are higher by over +1.0%. Ostensibly, this is due in large part to the fact that Greece – yes Greece of all countries – had its credit rating “raised” by 6 points after the Troika released $45 billion in funding. Of course, this doesn’t matter to the Greeks, for the public workers are striking today. Regardless, the euro is higher as are other commodities…its “risk-on” for the moment.
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