Markets are moving very fast. Yesterday European morning we wrote of big squeeze set ups, in both metals and equities (mainly European equities). We have had a brutal squeeze to the upside since then (Squeeze Sign, Chartology). With everything having surged, even beyond our scenario, in a very fast move, we would be taking some chips off the table. Things haven’t changed fundamentally, but the extreme bearishness among inbvestors, had to create this move to the upside. We still believe the squeeze will continue, but at a “cooler” pace. With Roubini screaming Europe to go bust on a daily basis, and Barton Biggs dreaming of a ultrashort position at the bottom, we had the very much anticipated bounce. Now we need to wait for the pundits to become bullish and dreaming of being ultralong, before we start shorting the markets, once again.
SPX short term chart, soon to hit the first resistance levels.
Stoxx vs SPX 3 day chart below. For the brave, buy SPX vs short Stoxx set up coming up on a short term basis only though (not currency adjusted).
Silver has had a tremendous 24 hours.....