The most important juncture in stock market history continues, until such time that the next most important juncture arrives. With last night's vote of confidence, Greek Prime Minister George Papandreou remains the man with a plan, and his plan calls for €28 billion ($40 billion) of budget cuts. While last night's results make it more likely that these measures will pass through the Greek parliament, it promises to be a contentious path rife with social strife. Eurozone finance ministers will next meet on July 3, so the Greeks have roughly a week to get their financial house "in order" (if we can still call it that). I was doing a segment on Bloomberg TV as the vote was being conducted last night at 5:30 PM -- being asked for a forward opinion into a binary event is awesome -- and opined to Pimm that a no-confidence decision would have likely triggered a "limit down" opening, while traders could well "sell the news," particularly if we gapped higher on the opening. That's not in the cards -- the futures are indicated down small -- so that plan is off the table; you trade the market you have, not the one you want. I will share that after I finished the segment (and met the fam for some CPK around the corner), I pulled up the global market futures and was surprised to see no upside traction on the back of the perceived positive catalyst. The easy explanation is that the market priced this vote in on Monday and Tuesday. That makes sense; the harder extrapolation is whether investors sell the news from here. Put a gun to my head and I'll say that we're playing hopscotch in a minefield, but that opinion and $2.25 will get you on the subway. As I reiterated on the tube last night, there are three primary tells (ex-Greece) that are on my radar. In order of perceived importance:
I said it before and I'll say it again; Greece isn't the problem, it's merely a symptom, and yesterday was yet another step in the "extend and pretend" process that has engulfed our world for quite some time. That doesn't mean we can't rally, but we need to qualify the move and acknowledge the distinction between a rally and a legitimate economic recovery. As that's murky at best, my tactical game-plan remains in place: stair-stepping between S&P 1250 and S&P 1350 and watching our tells for guidance as we together find our way. Good luck today.R.P.Follow Todd and over 30 professional traders as they share their ideas in real-time with a FREE 14 day trial to Buzz & Banter.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
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