Italian and Greek stocks have been badly bruised in the recent weakness and both indices have now made bottom extensions. This fits well with the bottom extensions reported in the US and so we expect a bounce on both sides of the Atlantic. We don’t yet have similar signals in the major markets – US equity index futures say, or any of the major European indices – but we may not get them. Sometimes there are only indications from minor markets even when quite big moves are coming.
For now, we still expect that this will be a bounce in a bear market but some markets will have quite big rallies. We have bought the US, as reported and are now looking for places to buy our usual European candidates of Germany and the UK. We expect that dips will be small for the next day or so, maybe bigger later.
