Earlier this week investors were forced to grapple with unusually weak demand at an auction for bonds from Germany. It was the weakest demand in 16-years.
That kind of response suggests investors are starting to look at all of Europe in aggregate and not the stronger nations versus the weaker nations.
”It shows the financial woes are moving from the periphery to the core,” says Ron Insana.
And if the crisis threatens Berlin and potentially the people of Germany - the region’s largest economy, then trader Brian Kelly believes leaders will act.
In fact, Kelly thinks some of the recent rhetoric could be telegraphing plans to do just that: He points to the following:
- A softer stand from Juergen Stark about bond buying
- A move by the IMF to create new credit lines for EU member nations
- Word that the ECB will buy 20 billion a week in bonds
"If I'm reading the tea leaves properly, it's almost time," he says.
In other words, Kelly thinks something big is coming. CNBC Contributor Ron Insana says the EU certainly should consider a major move. “It won’t end until Europe goes to 0% interest rates and massive quantitative easing like the Fed.
Of course that begs the question – how should you trade the market on Friday?
”1155 is critical for US investors,” says trader Guy Adami. 1155 represents the 50% retracement from the leg up from the low of 1068 on Oct 4th to the Oct 27 high at 1289.
How the market behaves at that level should inform your thesis. “But I wouldn’t buy the market until the S&P trades above 1183,” says Adami.
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Trader disclosure: On Nov. 23, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Adami owns C; Adami owns GS; Adami owns INTC; Adami owns AGU; Adami owns NUE; Adami owns MSFT; Kelly is long GOOG; Kelly is long JEF puts; Kelly is long LO; Kelly is long PM; Kelly is long treasury notes; Kelly is long SPY puts; Finerman owns AAPL; Finerman owns JPM; Finerman’s firm owns AAPL and short calls; Finerman’s firm owns GOOG; Finerman’s firm owns JPM and long leaps; Finerman’s firm owns IBM and short calls; Finerman’s firm owns WMT; Finerman’s firm owns TGT; Finerman’s firm owns M and short calls; Murphy owns AKS; Murphy owns WG; Murphy owns X; Murphy owns HAL; Murphy owns DE; Murphy owns M; Iuorio is long puts in SPY; Iuorio is short calls in SPY; Iuorio is short VXX and long calls in VXX to make a net long position
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