By Greg Peel

The Dow closed up 153 points or 1.4% while the S&P jumped up 2.2% and the Nasdaq a full 3.0%.

If Paul Stanley still wants to rock and roll all night then all he had to do was follow Wall Street last night. On heavy volume, the Dow initially fell 250 points, clawed that back to be down only 55, and fell again to be down 200. Up to about 3pm, one might have been tempted to declare a "capitulation" session which in its self is a positive sign from a contrarian perspective, if not the ultimate signal for a bottom. But there was more to come.

Wall Street simply gapped lower on the open, driven by what seemed to be more delay tactics and dithering from Europe. Greece had hoped it would have received the next E8bn tranche of its bail-out fund by now, but a failure to project sufficient budget reductions has held that up. Initially the troika was to hold up its decision until mid-October, cognisant of the fact Greece would run out of money by end-October. Before the bell on the NYSE last night, it was announced that decision will now be held up until mid-November, at which point, one presumes, Greece would be stone motherless.

Oh God ? another delay. Surely the risk of a disorderly Greek default just jumped up to almost inevitable status? At least that's the way Wall Street saw it from the bell. But if we look to the reason why the troika called yet another delay, we might see that there is method in the madness.

I opened my Report yesterday with the question: might this really be good news in disguise? I was referring to the news Greece had failed to reach its budget projection targets, in theory making it ineligible for the E8bn, the news of which had the Dow closing down 250. My suggestion was that given the disaster that would follow a disorderly Greek default, finally Europe would have to be spurred into definitive action.

Wall Street initially saw the new delay as bad news, but the reason for the delay is to allow time for the troika to renegotiate the haircut deal it had previously agreed upon (although not yet enacted) with holders of Greek sovereign debt. The initial deal was for holders to take a 21% haircut on the face value of their positions in return for EU support of Greece and default prevention. At the time, bond markets were pricing in 50% haircut. One reason markets are that much lower in the interim is the difference between 21% fantasy and 50% reality.