By Daniel U. Alvarez
PEREIRA – Stock index futures added gains Friday morning after a positive U.S. jobs monthly report and the European Central Bank’s announcement that it is planning to lend the International Monetary Fund euros in an attempt to ease the euro zone debt crisis. The European Union’s plan allows the European Community Bank to lend up to $270 billion euros and essentially use the IMF as a clearinghouse. November U.S. payroll jobs climbed to 120,000 and the jobless rate falls to 8.6%.
Assessment
Both of these head-line news stories are favorable for continued Friday morning stock market increases. However, the European sovereign debt crisis is far from being fixed. Until European budget deficits are addressed, this fundamental macro-economic problem will continue to drag the markets in the long-term.
Our strategy is to wait for the markets to culminate and look for sell-off points. We don’t believe the head-line is sufficient to create a trend and are setting up our trades accordingly. We are looking at entry points for the following ETFs: $DOG, $RWM, $SDOW, and $FAZ.
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