|False promises by Euro zone minister keeping alive Euro|
|Dreaming Euro Zone Minister|
Onething is common out of all the promises made in the 19 Euro zone summit or ECB conference, is that they keep promising of doing something, which they don't know and its never delivered but stock market has rallied on an average of 200 point on their fake promises. Last Monday, we got the news Greece will be kicked out of Europe and stock market was down 240 point and then rumor machine and false promises started which took dow from 12517 to 13117 i.e. 600 point and S&P500 rallied 60 point from Wednesday bottom to today's peak.
ECB's false promises gives them time till Thursday (August 2nd) to come up with some plan and so expect volatility to rise next week. Cutting interest rate by 50 bps on thursday would keep the rally at current level but cutting rate by 25 bps would lead to sell off. ECB has dig the grave for Euro by promising of doing something which it cannot deliver. Whatever decision is made will still require approval from 17 EU countries which takes forever. So, don't expect any magic on Thursday. We can expect blame game to begin on Thursday if ECB doesn't come up with any plan. I expect their famous common speech, "EU is working on some plan and will come up with something by weekend " and this news will be leaked to media by some secret source.
The secret rescue plan of ECB is that, "It has no plan" but stock market can rally and hope someday ECB will come up with some plan.