If we are going to crash under a heap of PIIGS debt and Eurozone contagion, a lot of people will look like soothsayers. I don't think the market is that easy. Why is Europe up so much when we have a crisis on our hands? Why aren't we going down more? I have my own theory: it is priced in. This is the most advertised problem in the world. We've gone through this in January, May, and November 2010. This feels like act 4. The story is old and tired and everyone knows about it. Greece bonds are priced for a 75% chance of default. The EU and IMF will bailout Greece, they say they will do it and when they get it done, we will be at much higher prices. We are gapping up big here and it feels like the real deal this time.
We didn't have a classic capitulation, but we got a slow motion version with enough fear shown in the put call ratios and finally a spike in the VIX yesterday. If you are going to short, you have to pick your spots carefully. For the next month, it will be much tougher now on the short side, and easier on the long side.
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art cashin says the trading days coming into yesterday reminds him of 1987
2 things.
First, the restructuring of debt for Greece (bailout) is a short term fix.
They(unfortunately) are doomed to fail in the near future. Maybe before years end. Lots of jobs are to be lost and very high taxes in Greece..obviously thats why u have riots.
second, this move up on the s&p should reach 1300 or just above by next week.
Like I've posted b4. I see a move lower again before earnings start in July. Followed by a move higher from decent earnings. Kinda like we had in April.
good luck
The American yokels are still scared. Excellent rally in Europe but they still feel the need to buy put options and sell their equities. Been the same thing for a while, Europe does reasonable intraday and then the US opens up and they turn it all into a pig's breakfast again. It looks like every last one has to get shaken out of the market before somebody is going to finally be more agressive on the ask and force them to unwind their fear trades.
By the way, financials leading the way today. What more could you possibly ask for?
the same happened with lehman and bear where everyone knew. contagion is nasty.
I don't think people knew that Bear or Lehman were going to collapse because their stock prices held up remarkably well up until the last few days. The Greek bonds have been pricing in a likely default since early 2010.
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