Spanish stocks were hit especially hard on Friday after the lackluster performance by European Union politicians in order to get some type of solution to the debt crisis. The Spanish prime minister suggested that they weren’t quite ready to ask for a bailout yet, and this of course will hurt Spanish banks. The main reason of course is the fact that Spanish banks hold so much Spanish debt. With this in mind, they will way down this index over time, and we are going to avoid it until some type of solution is put together.
Currently we see the 7600 level as massive support. If that level gives taken out to the downside, this market could fall much farther. We don’t necessarily think that will happen however, but a nice range looks to be forming between the 7600 and 8200 levels.