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Stock Market Rally On the Horizon According to the Smart Money
In Chris Ciovacco’s latest article he explains how the market activity of hedge fund managers and other industry pros is signaling that a deal in Europe is about to be struck. In other words, the ‘smart money’ is positioning itself in now before the anticipated European rescue deal is made. If the smart money is correct, a 27 month drag on the market is about to dissolve, which could correlate into a multi-month rally.
To elaborate on this possibility, Ciovacco explains why readers should review the latest demand increase for Spanish bonds. Interest in purchasing Spanish debt (just one month ago Spain was believed to be the next shoe to drop in Europe) has skyrocketed.
For more proof that investors (particularly the ‘smart money’) are moving to the ‘risk on’ trade, examine the technicals for major European indices. European stock markets have established a bullish set-up known as an inverted head-and-shoulders pattern. This is occurring in Spanish, Italian and German markets. Technical set ups like these are well-known to precede significant market rallies. This bullish set-up and signal is similar to early melt-up periods in 2009, 2010, and 2011.
Over the past 27 months, every time the markets have stalled and reverted downward, the root-cause has stemmed from concerns in Europe. No other region or sector, not even America’s weak unemployment numbers, have hurt the market like Europe’s fiscal crisis. With this road-block potentially being solved in the near-future, Ciovacco believes the markets could be on the cusp of a major rally.
Click here to read Ciovacco’s full article on the subject (video included).