Consider Emerging Markets, Once Again
As the much-rumored Greek debt deal failed to be reached over another tense weekend, European Finance ministers are set, once again, to meet in Brussels today to craft a solution, or at the very least form a firewall to protect the highly vulnerable domestic banking system. Of course, the tension in financial markets clearly resides in the minds of the bearish risk-off crowd, as global equity markets score fresh 2012 highs on the eve of the latest meeting, leaving many asset managers scratching their heads.
Several weeks ago, I suggested that traders and investors target Jan. 20 as the key date to watch for a potential equity market reversal. Several factors coincided to suggest the date, the most important of which were the first regular equity option expiration of the year, the beginning of the Chinese New Year holiday and the technical configuration of the stock index futures markets. More succinctly, it seemed that traders' books were being squared, all those who either needed or wanted to sell were finished, and prices would drift up in a seller's vacuum. The path of least resistance was higher, and re-risking in the New Year would complete the process as new money was immediately put to work by both long-only asset managers and hedge hoggers alike....591 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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