Greecing the Bull!

Today’s market action was a roller coast of good turned bad. The Dow pushed up to 10955.51 on positive news from jobless claims that were at an 18 -month low. Around 2:00 though, the Dow abruptly sold off over 100 pts. when comments about plans for Greece’s bail out by the IMF seemed highly unlikely.

The sell off in the DOW after the IMF announcement of “tres, tres, mauvais!”

A little back story since the last Greek blog(Feb. 11th) in this soap opera of fellow EU nations. Germany and France have been leading the way to offer moral support, though not monetarily, to the Greeks. This is being done by EU nations to keep the EURO from totally imploding against the dollar. This week the Germans and French were to reveal their plan to help Greece out, but instead passed the buck to the International Monetary Fund.

Today the IMF came out and let the world know their position on bailing out the flailing Greeks. IMF President Jean-Claude Trichet said that getting money from the IMF for Greece’s debt worries instead of EU government’s would be “very, very, bad.” And these 3 words sent the EUR/USD crashing down to make new lows.

Commodities just tanked after this bringing the rest of the market with it, although financials and service sector held onto gains. Tomorrow I will be watching the EUR/USD closely to see if the EURO continues to weaken against the dollar. IF this happens, commodity stocks such AKS will be prime for more shorting. I would also look for a lot of profit taking in tomorrow’s market in these “uncertain” times, so be careful of the longs!

I am not bold enough to say that this is an end to the bull rally, but I think we will definitely see some correction through the next week. Remember the market is closed next Friday. So with the Greece bail out plan far from secure, it would be hard to imagine a lot of buying coming into the market before a three day weekend.