The bounce back from the low had being impressive, but little was resolved except for the short ban. The light volume bounce that we saw on Friday was followed by an even bigger bounce on even lighter volume today. The fact that most European markets were closed helped to slow the action down and the Sarkozy and Merkel meeting tonight brought in some optimism. If there is more positive news on the discussion of the “euro bond” progresses, we could rally some more to mid 1200 on the S&P, but anything less we may be looking at a sell the news reaction. Given the recent steep drop and the big bounce, a 10-20pt profit taking could be setting up by mid week.
