Germany Approved ESM and US Politicians Are Trying To Roll Back the Fiscal Cliff. Buy Calls

I have been working on a new options trading platform for 3 years and I launched it last week. Register for the FREE WEBINAR and I will show you how it can help you make money. The webinar is tonight (9:00 pm ET). The market continues to rally and we are making a fresh five-year high this morning. Germany approved the ESM and European credit concerns have subsided dramatically. Asset Managers are in "risk on" mode and they don't want to miss a year-end rally. Europe has been weighing on the market the last two years. When credit concerns have subsided, the market has staged a sustained rally. I believe that the bid is strong and any pullback will represent a buying opportunity. The European banking union released its plans for a centralized banking system and they were in line with expectations. Their goal is to approve the plan by 2013. The ISM has $1 trillion in its slush fund. It believes that Italy and Spain have "done enough". This means they would be willing to provide bailout money it needed. Spain's Prime Minister has not yet asked for aid from the EFSF. He does not want to relinquish control over fiscal spending and with interest rates dropping; he will hold off. China's economy is soft, but the PBOC is ready to take action. The Finance Minister said that they have plenty of monetary firepower. Traders would like them to be more progressive, but this backstop will support the market. The FOMC will release a statement and I am not expecting the rhetoric to change. They will not give a timeline for QE3 and that is bullish from my perspective. Additional easing won't stimulate the economy and this lack of action is a sign of confidence from the Fed. Politicians (both parties) are negotiating for a six-month fiscal cliff reprieve. They are working on a “more substantial” plan and they want to buy time. We all know they are simply kicking the can down the road, but this postponement is bullish for the market. Bond yields are at historic lows and Asset Managers want to rotate into equities. They are afraid that they will miss the next decent rally and they will aggressively bid for stocks. This means any pullback will represent a buying opportunity. As long as the SPY is above $143, you can buy with confidence. We all know that nothing has really changed. Structural deficits will drag developed nations further and further into debt. These dark clouds will roll in some day, but they don't pose any danger today. Look for the market to grind higher today and the rest of the week. I am long calls on stocks that are breaking through resistance. In some cases I am buying laggards and in other cases I am buying leaders. I want to see heavy volume and follow-through. Play this rally, but be prudent. . .

Daily Bulletin Continues...