Saving Athens

What was once a mighty empire really needed help this time!    Okay, this isn't a joking matter, but it goes to show the relevancy of a single country's credit worthiness to the rest of the world.    In fairness,  Greece isn't a big country and it probably doesn't need a lot of money to bail her out.   However, given how the investors have played this particular issue recently, we are witnessing that billions of dollars of stock market value is at the mercy of Greece's problem.    Isn't it interesting how we are so connected these days?    Of course, the Greece issue isn't that simple because it merely shows the investor's fear when it comes to any sort of insolvency concern, whether it's from a bank or a country.

Today's rally is the result of speculation that a European consortium is in the process of putting a plan together to aid Greece.    Nothing is concrete at this point,  but it's largely expected that some bailout will come out of this and limit contagion.    Market closed at 1070.50, which is right at the resistance point we’ve talked about this week.   The USD dropped significantly/ Euro ticked up and all of the commodity related names moved higher as a result.    We have been playing some commodity names off our list today and we do feel there's a good probability that the momentum lasts a bit longer in this sector given the current relevance to a bailout.    As far as the overall market,  it's just a bit hard to imagine that market can start a meaningful leg up any time soon.    It's definitely somewhat healthy for this market to settle down its emotion and repair its recent technical damage.   Ideally, we need to test the recent bottom at some point to call 1044 a bottom. 

In addition, even though the earnings reports have slowed, some names are still showing this market good stuff and overall market is reacting better on an individual stock basis.    In AH tonight, we had DIS BIDU NTGR  report better than expected#'s that appear to be pleasing investors in AMC trading.   Also, VECO, HAR  had excellent reactions and many so-so reports still had upside.   This could be the blessing we noted of getting past the peak of earnings in January as sentiment is changing towards reports.  The oversold conditions of many reporting stocks producing so-so called reports now have basically priced in all the possible bad stuff.

Bottom line, it's only 2 trading days down and already it feels like a long week.   We'll definitely have more Greece related headlines coming our way during the next few days.  Hopefully,  it's positive to keep USD to the downside and give equities a fighting chance.  If this is the case, we do like a trade in the commods here as the short covering alone can give it some nice upside at this point.  *A possible new/ big saga is brewing in US/China relations and will likely takeover the headlines very soon.

Today was simply what Monday was supposed to be after market reversed on Friday.  Today’s news of a probable resolution was the expectation this weekend.   After Friday’s close of 1066, today was the follow -through you can say as we hit H1079 with individual stocks getting better action than on late Friday’s ETF surge.   It is not overstating that now when the Greece bailout is finalized, we may get a sell on the news reaction.   The action from 1044 to 1079 may have priced in the majority of a resolution.   This does not mean commods can’t continue as the probable currency affect of a bailout should help commodity linked stocks.