The DAX is up close to 10% YTD, other markets haven’t done quite as well, but I’m looking for some profit taking into the close, especially with no actual progress made, and the hopes and dreams linked to LTRO getting ahead of themselves. I think that could well lead to some afternoon weakness here as we have priced in better than we got out of Europe and it is hard to look at the economic data here and remain convinced that all is good and getting better. If anything, the theme that companies got ahead of themselves and hired and built-in anticipation of sales that never manifested themselves is alive and well.
Also, for the first time in ages I feel like a total contrarian. The market has gone from saying negative things but being long, to saying positive things and being long. On top of that, it has been a good month for fading rallies, so in spite of the high total number, it hasn’t been a bad month for prudent bears (especially when it was so obvious the market wanted to rally on PSI rumors).