The market retreated yesterday on comments that the German’s are not automatically going to backstop any Euro zone problems. The recent rally is based on Draghi,s comments that the ECB will do everything to save the Euro. The reality is they will do some bond buying but that will be far short of what is needed. We are in August so the maket is effectivily asleep. However there is a realisation that this crisis is far from solved. Come September the ECB will be required to back up their promises with solid action.
In the meantime we sold off yesterday. Today is starting negatively.
Ranges are on the Euro 1.2320 and 1.2250 the S&P 1404 1385
We will likely test the lower levels first.