You may know of the group as the Plunge Protection Team.

Assuming they exist, I haven't seen any obvious indications lately that they've been active in propping up prices. But maybe they're just doing a damn good job!

What is worth pointing out is a different sort of PPT -- one acting in broad daylight. The only difference is that this PPT impacts price indirectly, through market-wide sentiment, rather than alleged overwhelming manipulation of prices.

This alternative PPT is the IMF.

You may have heard that the International Monetary Fund just today announced an initiative to bolster its unofficially official bailout fund, hoping to add a whopping $500 billion worth. The ultimate goal is to be able to alleviate a funding gap in global markets of as much as $1 trillion dollars.

Interestingly, this announcement comes at a time when near-term Eurozone sentiment seems much improved. Whether it is better-than-expected debt auctions, confusion over recent proposals/plans, or simply investor fatigue ... markets don't seem quite as antsy lately. In other words: the IMF is acting with a bit of market momentum

But really, is there any meat to this IMF proposal?

They have come out on several occasions in the last six months explaining their hopes of raising bailout money to help protect insolvent Eurozone banks and Sovereigns. And to-date there has been little interest among international members to contribute.

Maybe the hope is that it will help diffuse a potential economic grenade.

Not only has S&P dealt zone-wide credit downgrades to European countries (including the all-important France who, along with Germany, are integral in backstopping the EFSF backstop), but the World Bank just yesterday announced a downgrade to its global growth forecasts (2.5% which, upon my further calculations, is beneath the commonly watch 3% threshold where we start using the word 'recession'.)

Of course, the IMF maneuver may simply be a way to create interest in the February G-20 meeting (where the IMF hopes the agreement can be struck.) These G-20 meetings have become notorious for their lack of influence. But this latest IMF proposal can certainly help build the hype going into the end of next month. Because without hype, the G-20 has got nothing.

In the current environment, there could be an opportunity to play for a near-term corrective rally in the euro, especially as US stocks (a key gauge of global risk appetite) move up through key resistance.

S&P 500 Weekly:

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EURUSD Weekly:

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