 central banks are promising the best of all worlds for the equity markets and traders on the equity markets yesterday started to really go all in at least when you look at euro stocks and at least at the DAX which had a big jump upward after the Bank of England actually promised to even to do even more in the coming weeks and months should the economy the UK economy we can even further so the specter of low rates for a long for a longer time has actually motivated buyers to get into euro stocks that was something that was was expected at least because funds were have a strong overweight in US stocks they were going out of euro stocks so sooner or later if the signal was there and it seems that there was some kind of signal yesterday because of the Bank of England should the signal be there they would diversify from euro from US stocks to euro stocks and it might be a first sign that this is actually happening in the end we got no real alternatives right now to stocks because central banks are engaging in pushing rates even lower yesterday was the Bank of England trying to really execute on the QE bond buying program actually it fell short by 52 million pounds yesterday of its target to buy more than a billion pounds of long-dated government debt it was just that investors were not ready to sell those papers so those bonds which still have a positive yield on them so they hold on to them and the Bank of England actually fell short of its target and so its efforts to stimulate Britain's economy are just a little weaker than they should be in the current environment so worldwide we've got 180 billion dollars of bond buys buying by the central banks so yes there is some effect if you look at the arguments from George Soros Carl Icahn and the hedge fund managers and the big boys out there in the equity markets they're very bearish because they somehow rely on the traditional valuation metrics and methodologies to say okay the fair value of stocks is way below it was Mark Fabi yesterday saying okay he expects a crash in the S&P 500 index by 50% given from current price levels and he says that okay in the end valuation metrics are not fair but that is a traditional valuation metric in a world where central banks are not buying 180 billion of government bonds on a monthly basis but it also could be if you believe that this time everything is different it might be very dangerous opinion because if there is one very very expensive saying or quote about the markets it is that this time everything is different yesterday on Wall Street there were somehow weaker oil prices they somewhat hovered along the close of the day before because there were doubts on the OPEC rumors OPEC and it was Venezuela the day before saying okay we need a meeting between the OPEC and non OPEC producers so somehow Russia and perhaps even the United States meet on one negotiation table to somehow cap the worldwide oil production yeah nice try from Venezuela but nobody really believes in that and so that somehow dampened oil price yesterday there was some profit taken in oil stocks yesterday as well so well we had some some strength in health care and technologies stocks yesterday on Wall Street but the big thing is the DAX which actually went up strongly after the Bank of England policymaker Ian McCafferty said more quantitative easing was likely to be required if the UK's economy if the decline should worsen and that was some signal for the euro stocks in the DAX yesterday broke above the resistance at 10 487 10 500 what we've got there is the high of April and what we've got there is the downtrend line coming from the all-time high in the DAX starting at 12 400 if you draw a line on the tops since then in the downtrend we have that downtrend line and we've got the horizontal resistance lines over there's a cluster resistance at 10 500 and if you look at the DAX it strongly broke out of that so that might be the start of at least it is the end of the downtrend but it might be the start of a new uptrend or at least a new sideways trend and no downtrend anymore in the DAX so that is some sort of step in the right direction we have to look at it in detail in the coming days and weeks what comes out of that but it's a positive signal could be the start of some diversification by investment funds from their overweight of US stocks and somehow they could diversify back to euro stocks which have significantly lagged behind