Saturday, July 11, 2015

Markets Yo-

The Market Trend Model (data sheet) moved to a more neutral bias on Friday as it appears sellers have become exhausted (for now). Anyone selling because of fear about the Greek debt crisis has had ample time to exit the market in the last three weeks (or the last few months, as this crisis has been a known known for quite some time). However, a resolution to the Greek crisis is not yet a foregone conclusion. Just today the German finance ministry proposed that Greece be suspended from the euro area for five years (article).

The market indexes showed favorable price action on both Thursday and Friday, but it appears market participants want a final resolution to Greece before any real upside potential can be realized.  Current news flow seems to indicate this Greek mini-drama may have a few more days left in it. According to The Guardian (Brussels) Europe Editor Ian Traynor (@traynorbrussels), "Greece Euro-group session in pause, nowhere near agreement. Unlikely tonight. Could be passed to Sunday summit."

The market indexes are still locked in one of the longest and tightest trading ranges in U.S. stock market history. The Russell 2000 (chart), the Nasdaq (chart), the Nasdaq-100 (chart), and the S&P 500 (chartall look to be in similar consolidations during the last three weeks as the major indexes have moved in unison with the upcoming earnings season taking a back seat to the headline news of Greek debt woes.

At some time in the very near future this Greek debt crisis will be yesterday's news and the market can put its focus on earnings growth (or lack thereof) in the United States.  As always, remain mindful that anything can happen from one day to the next.