Nothing much to say today. Yesterday SPX dropped 41 points and today it recovered 20 points. Looks like a dead cat bounce and more like a sucker’s rally. It was a gift to those who were long yesterday morning, a chance to get out. Now, I am talking very short term for the next few days or till the end of the week and I expect SPX to test its low of June 4 by then.
I think the Greek election is on Sunday, June 17 and most traders will reduce their holding before that. That is one unknown factor no one has any control. Wolf Richter has following to say:
On June 17, when Greeks try once again to choose their next government, they may decide their country’s fate—or not. One thing is for sure, whichever parties will be able to form a coalition government, they will push for more bailout billions, but this time, forget the conditions, the structural reforms, the austerity. Just give us the money. And however much we want. They’d watched how Spanish Prime Minister Mariano Rajoy had asked for a bailout ... after reassuring everyone with utmost sincerity and for the longest time that neither Spain nor its banks would need one.
Not a detail escaped the Greeks when, after the bailout meeting on Saturday, Rajoy proclaimed victory, saying he’d been offered €100 billion, no strings attached. That’s what Greek politicians wanted to hear—and they jubilated; the yoke of German-imposed structural reforms and austerity had been broken. It didn’t matter to them how much German, Finnish, and EU officials protested that that’s not how they understood the agreement; there were, in fact, lots of strings attached, they said, which makes you wonder if there was even an agreement.
And so Greece’s election may not decide the country's future in the Eurozone, but may simply prolong the extortion racket to keep the money flowing, freely this time, and in liberal quantities—efforts that the Troika may consider distasteful and brush off with disdain. But it’s not even certain that the winning party will have enough votes to form a governing coalition or that any parties could agree to form one. In which case, a third election would be required, a possibility that Antonis Samaras, leader of the conservative New Democracy, called “suicidal.”
How long Germany and other Northern European countries will put up with this extortion racket is to be seen. The pink elephant in the room is Italy and no one is talking about France. But I think we will have to wait for another six months to see it all unravel.
Even if Europe survives through money printing, USA may not. If you think you cannot trust the Bankers, what do you think about the politicians? Who do you think has fu**ed up America more, Bush or Obama? But this is not the place for political discussion and yet our financial security is intricately linked with what these crooks do. Unfortunate but true.
Coming back to market, for the past four trading sessions we have moved in a range while the Bollinger Band is getting narrow. Up one day, down the next. But those of us are in cash, have nothing to worry about because as and when the opportunity comes, we will be ready.
That’s it for today. Thanks for reading http://bbfinance.blogspot.com/