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Latest Rumor Sees 16-17% Greek Bond Haircut, Sending European Stocks Soaring

  
Analysis, Economy, Education
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The latest targeted leak in the European “stress” tests is that according to German bank sources, the discount on Greek debt will be in the 16-17% ballpark. This compares to an earlier rumor leak of a 10% discount on Greek debt which however did not sufficiently spike the market, leading to rumor #2 which so far has done a good job at pushing the AUDJPY (aka stocks) higher. The quid pro quo however, is to take not only German but now French bonds, will be out of the “stressed” picture. As Reuters reports: “The presumed markdown applied to French sovereign bonds will be 0.7 percent, one of the sources, both of which are based in Germany, added. “German sovereign bonds will not be stressed,” both sources confirmed.” Of course, with Greek bonds being stressed to market (which is where the discount actually implies they are tested), French bonds would would suffer a far greater markdown than 0.7%. But then again, the EU has already bought up a ton of Greek bonds, and little if any French. Can’t have the bank pick and choose which country to bail out now, can it.

Just see Today Morning ,I had written European Market short term trend is up !!

Trading Book Review Of the Week: The Three Skills of Top Trading

  
  Education
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This book is written about how three mutually reinforcing skills make a complete trader.

1). Pattern Recognition and Discretionary Trading.

Using the Wyckoff method you will see chart representations of how hot growth stocks are accumulated in bases for long periods of time. They eventually have pull backs then break out to new highs and trend. You will also see how they eventually have exhaustion tops on high volume that fail to rally and they begin to break down in distribution with lower lows and lower highs. The author encourages discretionary trading through experience by being able to identify market action through the models from past stocks. This work ties in nicely with the school of thought from legendary traders William J. O’Neil, Jesse Livermore, and Nicolas Darvas.

2). Behavioral finance and systems building.

The book teaches that readers must be flexible in their trading. We are merely a ship on a sea of market participant opinions. Follow the prevailing sentiment during the middle of the the trend, and go contrary to it at the extreme tops and bottoms. Hope, fear, and greed are the dangers and the movers of the market that cause support and resistance,  trends, and chart patterns. The action of the stock market is nothing more than a manifestation of mass crowd psychology in action. The Pruden model shows a chart of how accumulation, mark-up, distribution, and markdown works in the market tied to price, volume, sentiment, and time. It truly explains how the price pattern and charts in growth stocks generally play out historically. (more…)

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