looks like it will be another very interesting week at the trading coalface.
- there has just been some breaking news out of Germany in the last 10 minutes saying they they are backing away from agreements worked out on Friday regarding the Greece bailout, which puts a Greece default firmly back on the table.
- before jumping into any trades today, there were a couple more bits of info that came out after the close in the US on friday night, both Goldman Sachs and the IMF both cut the GDP outlook for the US economy, although hardly surprising one has to worry about the Goldman Sachs forecast because cast your eyes back a couple of months at the oil price it was when Goldmans downgraded oil it fell $20 a barrel in a couple of trading sessions, like it or not they carry a lot of weight on wall street and it wouldn't surprise to see some selling early on wall street tonight.
- keep and eye on the US futures they have opened around 0.33% down on the SPX, would not surprise if traders try and test the 200 DMA at 1257 on the futures markets during our market open, which will have obvious ramifications for our market.
- seasonal factors are not favourable at the moment for the XJO, we are only 8 trading days away from the end of the financial year, which we all know means end of financial year tax loss selling which will likely cap any above average gains in the spec/mid cap sectors, also being the Northern Hemisphere summer will result in reduced volumes which will likely lead to a continued orderly decline in the market.
for me i'm sitting on my hands at the moment, waiting for a bit of a capitulation scenario on our market before looking for some medium term holds, it would hardly surprise if we break below the Japanese Earthquake low today.
I firmly believe once we see a bit of capitulation that we will see a short term rip snorting bounce in global markets led by short covering, but for this to happen they have to sort this Greek crisis out, then it wouldn't surprise to wake up one morning with the DJIA being up 250 points.
