The summer rally is fading. We have about 10 days before the market will start concentrating on some serious issues.

ESM is going to come to the fore with regards the legal challange being brought by Ireland to the European court. Greece is close to running out of money.Spanish bond yield are rising. LIBOR scandal driving down bank stocks.

On the good news side, slightly better figures in the US.

We are seeing a rise in US yields and therefore a stronger dollar.

At the moment buying the dollar is the easy trade, either against the JPY but especially against the Euro.

Stocks are Harder as the S&P has still good resilience.

Trading conditions are still unclear but we are headed to some decent activity soon.

In the meantime levels are 1407.5  and 1397 on the S&P

1.2300/25  1.2250 on The Euro.