Well Mr Draghi, Merkel, Hollande and Monti, all have stated they will do whatever it takes to save the Euro. This week we need to see the action to back that up. Namely bond buying on a large scale. This will not be the first time the ECB has bought bonds so it is not a fix for the EuroZone. What they can hope to achieve is lower Spanish and Italian Bond yields. Below 6% will be a successful target.
Any fix will probably cause weakness in the Euro so our view on 1.1888 downside target is still intact.
The S&P is more difficult. Slightly better news on growth and Draghi’s comments caused the huge rally to 1379.25
The upside resistance is at 1400 and 1419.
The key to the S&P will be the Spanish bond yield and the action of the ECB. Beware of rumours because we are in a thin summer market. Any hint the ECB is buying will cause sharp bounces. I expect this euphoria to die out before the end of the week, in the meantime it is a jobbers market.