The Spanish index fell precipitously during the session on Tuesday, in this makes sense to us as there has been no “grand bargain” for Spain over the last week although the markets had anticipated. The bailout has not been requested, and as such we should start to see various sectors in Spain suffer as a result. This would be especially true of the financials as they hold so much Spanish debt.
For us, the €7600 level looks to be support and should hold the market up. However, if it does not we believe the €7200 level is almost an afterthought at that point. Because of this, we are paying attention to €7600 as a significant level for which to place a trade. However, we need to wait to see what the reaction is in order to decide which direction to go.