Europe up for the day!

Good evening!

Today is a holiday in the United States as it is the festive of Martin Luther King Day. As a result of that, the US Stock Markets have remained closed all day. So all we have seen is trading in Asia as well as Europe.

Let’s recap what happened on Friday: the S&P rating agency downgraded most of Europe last week at its close in at least one full notch or more. Special attention goes to France for being the first country to lose its AAA rating in the Eurozone.

So, in view of this movement, what did we expect today? The normality is that the equity markets should have corrected a little bit and pulled down their value. INSTEAD, the opposite happened. The CAC40 has closed just short of a +1% for the day, the DAX with a good +1.23%, AEX Amsterdam +1.29%, BEL20 and IBEX35 have remained flat for the day.

Does this mean that we have to wait for America to wake up from their holiday and decide what to do with the European indexes or has the effect just worn off over the weekend? Does it mean that Moody’s is more balanced than S&P and the markets have understood that France is still a strong country inside Europe?

It will be an interesting day tomorrow to see what happens.

Many traders and investors are standing on the sidelines waiting to see what happens and go with the flow. We still believe that there will be a good rally this year in all equity markets. The only issue is to decide when to enter.

We firmly believe that by the end of 2012, all indexes will be relatively higher and those who are capable of trading with guts and courage as well as with the technicals will make good money this year.

Trade safely. Trade with discipline.

Stay tuned and have a great day!

-Amar.