World markets had priced in a Lehman style collapse, which hasnt...

World markets had priced in a Lehman style collapse, which hasnt happened ( Yet )

Market has been driven by promises and dissapointment re bailouts , QE3's etc etc

Friday saw a UK QE3 bailout, and additionally ok jobs numbers in the US

This is combined with very attractive yields on stocks as a result of the selloff.

Very view earning downgrades have occured ( Yet )

Last nights promise of Euro bank bailout by Merkle and co will give this week some opportunity to "promise" rally once more

They have till month end to deliver the package, else we are down the tubes again

The main reason that makes going long difficult, is the fact that each media conference across the world has the capacity to change the direction of the markets at a heart beat

Tentatively I see the beginning of a Christmas rally. Some false starts and sells have to happen due to the supply sitting at these lower levels. Once there is a good shakeout, there is potential for a run into new year.

Next year is the problem IMO . The debt will still be there, and the shake up this year will see earnings pressures/downgrades appear in the 2012 reporting seasons.

I have stayed long through the shakeout but can see a point early next year where there is a need to seriously consider a return to cash, as the true "wave" will be seen in the world economy not necessarily only on the charts