Grexit ?

The market rallied strongly this week, shaking off the fears from last week, on expectations of more central bank stimulation. Although there was no specifics given at the various central bank meetings and testimonies, the market continued to stay surprisingly strong into the end of the week. This week-end a resolution to the Spanish banking crisis appears at hand and may provide a fillip for the markets first thing on Monday. However, the problem for the markets this week is the up-coming Greek elections which are essentially a referendum for continued membership of the EU. We can not see new money being committed to the market ahead of this key event and so are advocating a flat position. We will take profits early this week, in light of the bigger than expected gains and watch developments from the sidelines.