The party continues as we are vey nearly approaching 10000 on the Dow and 3000 in the eurostoxx. Good earning from Johnson and Johnson and Intel have buoyed the positive sentiment, and lifting the futures this morning. We have a raft of earnigns reports with JP morgan being one of the big ones before the US market open this morning. It is likely they will beat estimates, but any shortfall could see a reversal in stocks.
Looking at the S&P the double top formation at 1075.75 in the S&P 500 Dec. futures appears to have only provided temporary respite from the underlying bullish trend. The only possibility for this being a turning point is if it develops into a larger double top formation, although looking at the underlying strength this does appear a bit of a punt. Above recent highs, the 50% fib. retracement of the entire down move is at 1126.25 in the S&P 500, and 5921 in the Dax 30. A break of these levels would really scare equity bears and would like lead to an accelerated move upwards.
Euribor spreads have fallen some what as traders bet on when the rate increasing cycle will begin. It is still not likely to happen until next year, but eyes will be mainly focused on employment data as that will need to improve for a true economic recovery to take place.
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