Political leaders and economists in the euro zone are searching frantically for answers to the same question as a bond market rout of European sovereign debt accelerates, putting the future of the single currency in jeopardy.
Until a few weeks ago, the most likely outcome appeared to be that the 17-nation currency area would muddle through. The euro zone would bail out a few highly indebted small peripheral states, patch up its rickety fiscal governance and avoid either a break-up or a major shift toward federal integration.
That was then. Now it seems that without a radical game-changing initiative within weeks, the crisis may no longer be controllable. – Tighter euro zone gains ground as debt crisis exit, Reuters
Here is an update of the SPX Meridian Market Theory chart that I have been following throughout the year. In my last update – I was opportunistic in the mindset that the charts may have been pointing towards an approaching long-term low. And while we found a low a few weeks later, I now find myself reinterpreting (in light of what I have found in the charts and the data from Europe and Asia) what the most recent rejection may mean towards the market going forward.
You may say I am becoming more concerned as the market has double and tripled dipped the same positive news out of Europe.
Near term, in either case – bull or bear, I find the market precariously placed at the top of the range and likely to fall back swiftly over the balance of the month.
Charts & More – The Money Game
- Europe could be in worst hour since WWII, Merkel says (calgaryherald.com)