Mkt happy with ECB move; look out for downward move: Ross

As the European Central Bank(ECB) President Mario Draghi did not set any limit to the bond buying programme, global markets took it as a positive sign and inched upwards. In an interview with CNBC-TV18, Richard Ross of Auerbach Grayson said this is a reflection of what happens when the market gets what it wants. All the European markets are up and everyone seems to be thanking the ECB, added Ross.

However, Ross sounds a word of caution and says the jobs data from US can still play havoc and therefore, "Don't chase these markets and push all your chips in the middle right now," he advises. Here is the edited transcript of the interview on CNBC-TV18. Q: What do you make of what the ECB announced today in terms of the OMT (Outright Monetary Transactions) and what are you hopping for from that jobs number tomorrow?
A: Look what happens when you give the market what it wants. Even though their actions today were widely anticipated, we don’t like uncertainties. When we remove that uncertainty, you give people what they want and they respond accordingly, pushing out to a technical breakout here in the S&P 500, with highest level. Over 4.5 years to almost 5 years the DAX is touching a new high for 2012.
That benchmark European index is now up 22% year to date and also markets like Spain and Italy which stand to benefit the most from today’s action is up 5% and 4.5% accordingly. Yields in those two countries have come off precipitately testing 6% in Spain and almost 5% in Italy.
Across the board there is a resounding thank you very much to the ECB. In terms of the US, the jobs report looks like we got that positive surprise you alluded to in the lead end in terms of the jobless claims in the ADP number coming out of no where with a nice little positive after we saw some rocky economic data here in addition to the ISM. So a bullish cocktail of information. If we get one more bullish data point tomorrow, that could continue this advancement that we are seeing today. Q: What if the jobs number is a disappointment and what if within a day or so this ECB move loses charm because remember they are not stepping into the bond markets tomorrow. They are going to wait till a country asks for official assistance from the ESM or the EFSF and that could take a long time?
A: You make great points. You have said this all. We are at the tail end of a very strong summer advance. We are becoming very optimistic, we have all shifted now to one side of the boat. The last time we spoke I expressed my concerns for this market and those concerns are still valid.
We are set up for any potential disappointment here and we have pulled the rug out from underneath us in the recent past. That could easily happen today. From the alleviated levels we had a reversal on sentiment data, reversal fortune out of Europe. You are set up for a fast move down so you still want to keep dry powder there. Don't chase these markets and push all your chips in the middle right now.