After yesterday’s huge reversal and the blowout in Italian and Spanish sovereign spreads this morning, this was the day they could have broke the market.
No so. After some early weakness, the S&P500 traded straight up to close on its high. Whispers of QE3 and other nonsense were given as the reason the market moved higher.
What do we think? Too many traders getting short on the back of yesterday’s ugly reversal and caught offside. Not enough sellers, too many shorts. That simple.
(click here if charts are not observable)