There are more signs that Europe is still not out of the woods yet. The recent headlines of Spain have brought a degree of concern back into the markets, not much for a strong downtrend in the markets but enough to slow the almost constant rise in value of risk assets. The deteriorating condition in Spain’s housing market will not be as big of an issue as long at the rescue funds available are increased to a level that could sustain any credit risk in Spain, Portugal, or any other at risk countries that may come up. The conditions are such that investors want to know, if Spain falls will the net be big enough to catch them.
Broad markets are taking a hit today, as well as all of the other bullish plays that have seen steady appreciation since the beginning of this year. Tech is taking a harder hit than the other sectors and the global markets are also seeing big runs on their markets.
With the negative news that is due out this week, including the results of the voluntary Greek debt restructuring, the prevailing bias is going to be tested. Whether or not this is a failed test (bear trap) or not is yet to be determined, and the trends need to be watched closely.