It really is amazing. I understand mutual funds are behind their benchmarks are chasing, but all the chasing the past few weeks you would think would balance out the supply / demand, so that we could react to developments logically. We sold off to 1075 on fears of contagion from Greece to Italy, and then rallied back on the 'plan' to haircut Greece, bank recaps, etc. But now that contagion has already happened as Italy yields job to unsustainable levels, and France is starting join the party as well which is even more ominous, we rally anyway. I guess you just have to wait for the buying to end. I wonder if we will crater right out of the gate in January once the fund benchmarks reset and there is no longer reason to chase, and hedge fund year end redemptions kick in. Similar to what happened in 1Q09.
Don't let the wall street media fool you. Nobody is buying. The only buyers are IB algos buying/selling and recycling the same shares on extremely low volume to rope in any dumb money. You are right; the mkts fell in early August on the possibility of a Greek default. Now we have Italy, Spain, Greece and France all creeping up and we're rallying? The hypocrisy is blatant manipulation to allow the European banks to dump EU bonds at an inflated EUR to the ECB. This game was played a few years ago when the US Fed was buying similar toxic garbage from the US banks to only have it linger on their balance sheets forever. The game is rigged and those in power choose to keep it that way.