Gap Down and Go

This is not common.  A gap down that continues lower from the opening bell.  We haven't seen too much of this action over the past couple of years.  It is almost textbook to see buyers coming in off a gap down, especially when it is due to European news.  But we are below the open, after 30 minutes of trading.  It is a bit of a change of character, although I am still sticking with the view that we are in a trading range, and that we are close to the lower end of that trading range at these prices.  That trading range is SPX ~ 2050 to 2130.

These Greece worries have weighed down Europe, but traders will be surprised to see how little the market actually goes down if Greece indeed finally leaves the EU.  I would venture to guess that S&P wouldn't even finish -1% on the day, much less crash like some believe.  And that would just be a set up for a tremendous buy the dip opportunity and new all time highs, as Draghi would overreact and become even more dovish.

It is probably a moot point, because odds are high that they will kick the can again and give Greece an extension or another deal, whatever it takes to placate the markets.

These are attractive levels to buy ES, and I have entered a small long position this morning, expecting a bounce soon.