I must admit I’ve been quite intrigued by all of the recent financial drama the United States and Europe endured during the summer; however, it now appears both can breathe a momentary sigh of relief. They received some good news after enduring tumultuous economic events.
Markets rose the last Monday in August upon word of Greece’s two merging banks, Alpha Bank and Eurobank. The move is a step forward in the reorganization of the country’s financial system and supports a resolution to the European debt crisis.
The crisis began in Greece and has spread during the past 22 months. The country’s projections for tax and revenue had fallen short. In addition, some rich nations had overspent and didn’t really consider a plan for vigorous growth. Consequently, many European banks have been plagued with devalued financial instruments.
The banks are in need of more money to cover “write downs,” but resolving the issue includes figuring out how to spread the losses.
Americans, on the other hand, are struggling through a turbulent recovery, yet they’ve loosened their tight grip on their wallets and even shelled out money for pricey retail goods. This helped to boost consumer spending to 0.8 percent, the largest gain in 18 months.
Indexes also charged ahead taking on some bullish chart formations, which were enough to crack those technical resistance levels. In fact, the NASDAQ Composite bolted ahead shooting up 3.3 percent.
Investors are more interested in buying. The evidence: advancing stocks drowned declining shares and upside volume submerged downside volume. Indicator charts strong advances provided confirmation. New stock buy signals catapulted. The Broad NYSE bullish percent chart and some 23 of the 47 industry sector indicators did an about-face to bull alert status thanks to the more than 320 stocks showing P&F breakouts to the upside during the September 29th trading.
Apparently, the positive market news at the end of August not only raised expectations for higher market levels by the end of the year, but also Americans’ hopes that the country dodged a double-dip recession.
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