Three Week Rally: A Euro-Bubble Of Hope? (DIA, SPY, QQQ, IWM)

Courtesy of John Nyaradi.

Markets continued their three week surge on the hope that Europe will come to an agreement over Greece and Eurozone debt next week.

My only question: is the rally a true indicator of Eurozone stabilization or is it a hope bubble that will likely burst with the Eurozone’s potential collapse?

Regardless of a potential Euro bubble or not, the markets are sure drinking the sugar with Europe, as today marked the third straight week of surging prices. The Dow added 267 points today to close out on top, while the NASDAQ increased 38.84 points and the S&P 500 increased 22.86 points.

As members of the EU negotiate a potential crisis aversion for the ailing continent, one wonders if it is really possible that Europe can be fixed, and if indeed a second summit between its leaders can get the job done.

Is the market rally a bubble of hope or a symbol of real confidence in the continent?

Markets also likely surged due to further Fed talk regarding more easing. QE3 or any type of asset buying do not seem to be on the table, but it appears that the Fed is watching the economy ever so closely…

Today saw happier profit reports for McDonalds, GE and Microsoft; perhaps there is more light at the end of the tunnel.

Lastly, I was pleased to hear that the President will pull all US troops out of Iraq by this year’s end. After nine years of struggle, our troops are finally coming home.