Enjoying Melt-up Day ... ?

There aint nothing as a good short covering/melt-up rally day. The market has been in a flux the past weeks, but today's move proves, I think, that the upside surprise is much stronger than the downside and that the equity still wants to grind higher unless the world really(!) falls apart. On the flip side we are still some way below earlier highs and in this sense, it is very un-impressive. But the Bernanke put is very strong here. Good economics data at the zero lower bound is consequently completely cleansed of risk that it will lead to higher interest rate expectations since no one believes that Bernanke will raise interest rates anytime soon, nah strike that, ever!!

As FT Alphaville latches on to, the market is now trying to play the same game of chicken with the ECB and this time, the stakes are higher. Basically, you want higher equities we can deliver, but if you disappoint we will huff and puff your pretty little house down and all those small piggies will be left without shelter. So, does the ECB plan to deliver then. Well, it seems to be a good idea to cover any short on that prospect alone but on the other hand, Trichet et al would be prone to sticking it to the market just for the sake of it even if the macro backdrop leaves them with the last policy option available. 

So, lads and lasses ... make your bets!