So far the 200 day simple moving average is holding. The market was higher today, but gave us fits and starts a couple of times and for every massive rally head fake, we saw some stalling that looked like a sell off was starting. The market is tentative, walking on eggshells, exhibiting light volume and is looking over its shoulder, clearly waiting for the first guy to blink.
Greek Prime Minister Papandreou faces a confidence vote in his government tonight that may determine whether Greece becomes the first euro-area country to default.
Greece is still a complete disaster and will eventually slide into the Mediterranean, but for now we get to play this silly game of “tag” on a daily basis, while we wait for the “nanny state-ers” to figure their mess out. Because of this obnoxious daily dynamic, the market will chop until someone believes Greece may get off the front page for a week or two. Maybe we get there tomorrow, maybe not.
Every time I feel like being a knife catching, bottom calling psychopath, I simply look at the charts of GOOG, AAPL, most energy and material names. These stocks are now broken, most are below their respective 200 day moving averages. No time to be a hero OR Christopher Columbus. He thought the world was round…he got lucky.
I would rather pay a little higher, knowing that the turn has been made, until then I am keeping our the list light. I have no problem easing into positions and that could start tomorrow.
Over the weekend, I wrote a post about earnings pre-announcements and noted that the financials were most vulnerable to downgrade. Today, Citi went negative on some of the banks, you can read the story here.