By John Galt
November 28, 2011 – 07:20 ET
After the latest rumor de jour was crushed by facts:
IMF Denies Italian Bailout Package Talks
The markets do not care.
The Eurorumor of the day was enough to juice the futures and Asian markets overnight moving money out of the Forex safe currencies and into speculative plays for window dressing in the equities markets. The big movers were obviously EUR/USD and EUR/JPY with a nice gap in both as highlighted in this hourly chart of the EUR/USD:
Look for the rally in the EUR/USD to fizzle at 1.35 and as a consequence, the equity rally also probably on December 1st or 5th, with a lot of unnecessary bluster about the monthly fictional release from the Bureau of Labor Statistics on Friday.
The S&P 500 should rally on very light volume up towards the 1194 resistance levels with a possibility of retesting and failing at 1220 before the week is out. There are several world events which could overwhelm the markets including the Islamist fires of the MENA region and the standoff in Pakistan over the conflict this weekend. Whatever rally one witnesses this week, the reality of the European Union will eventually kill the rumor mongers and whatever rally is witnessed over the next week of trading.
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