For weeks on end, the European debt crisis has seemed like an all-eyes-on-the-asteroid hurtling toward earth. It appeared to get closer by the day; but no one could say if the asteroid would burn up mid-air, or crash into the global economy surface and annihilate the financial world as we know it.
BUT on Wednesday November 30, the round-the-clock Euro death watch suddenly stopped. European stock markets rocketed to a one-week high, led by a stellar 4%-plus rally in the bellwether Euro Stoxx 50 index.
In the words of a November 30 Wall Street Journal: "This is one of the more memorable instantaneous spikes in recent market history." And: "Make way for Monster Stock Rally" (Associated Press)
As for the reason behind the historic rise, the mainstream experts cite this event:
"An unexpected surprise announcement that global central banks will boost liquidity measures... by lowering the pricing for arrangements where one central bank swaps its national currency for another."
Well, that's one way to look at, albeit in retrospect. See, the Central Bank's 50 basis point "swap" cut was announced on November 30. But one day earlier, amidst the "dark clouds of Euro doom,"
EWI's Specialty Intraday Stock Service had already anticipated a rising trend ahead.
On
November 29, our
Intraday Stock Service on the
Euro Stoxx 50 presented the following labeled price chart alongside this bullish insight:
"The continued push up above 2226 by a five-wave sequence up from 2064 has clouded the broader view but is arguing that a more supportive wave picture is developing here. Moreover... more upside activity will be anticipated once any three-wave reaction is over."
Flash ahead and on November 30, our
Specialty Intraday Stock Service's Euro Stoxx 50 chart (reprinted below) shows exactly how the "monster stock rally" fits nicely into the Elliott wave script.