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A little Light in the Darkness

As expected markets edged higher in a rebound mainly driven by overall good results and new hopes of a solution of the debt ceiling based on a plan issued by the Gang of Six. On the back of – as always - strong Apple results Asian markets traded well in green territory, too – lead by tech shares.
On the opposite, Europe once again seems to make a step further to the abyss. Germans Chancellor Merkel stated yesterday evening that there s literately nothing to expect from tomorrows EU –Summit as "Further steps will be necessary and not just one spectacular event which solves everything,"  With 2Y Greece yield at 36 % & Spain & Italy 10Yr Yields further heading to new highs there s no reason for hurry, is it? In an unexpected clear moment of realism the IMF yesterday stated that there s a serious risk that the Greece crisis may spread to other Euro-Area states and cld seriously jeopardize recovery. Isn t it impressive how fast they realized the current situation?
For now, the rebound seems to continue and Calendar Call Spreads seems to be an appropriate way to play it given the historical flat termstructure.
But keep watching the Gov Yields & CDS Levels! As long as we don t see any significant relief there, any rally will be short lived especially as globally everybody seemed to be in a risk off mode, meaning no major positions (including shorts) which seriously dampens any chance for makes a short squeeze as there s nothing to squeeze left. So stay cautious and ready to simultaneously take any profits from rebound positions while starting overwriting again.