Paris had a reasonably decent showing on Thursday considering how much the CAC had gained over the last two sessions. The CAC still looks strong, and as such we believe that this is eventually going to be a buy-and-hold type of scenario. With the Spaniards been so close to asking for a bailout, we think French banks will be some of the strongest performers in Europe. Remember, they are heavily exposed to Spanish debt, and once the debt is considered solvent and reliable, many investors will not only rush to get into the French banks, but many of the ones who have shorted it will cover their positions.
The 3600 level seems to be vital for the buyers to cross in order to get to this buy-and-hold mentality. Until then, we would buy this index on pullbacks that show signs of support. We fully expect that there will be plenty of opportunities, but eventually the €3600 level will be broken by the bullish.