I remember when I was a kid … Oh wait! I thought I was talking to my son. Sorry.
What I meant to say was, “I remember all the way back to 2008-2009 when the market was swinging wildly, much like it is today. The big difference, though, is the size of the swings. Back then, (when I was a kid), a 1,000 point swing was not uncommon and many a day saw a 500 pointer. So, if you think it is tough now, let me tell you, when I was kid …
- The S&P500 mini-futures (ESH5) are starting to show the kind of volatile price swings that make experienced traders think the market is reaching a major inflection point.
What finally happened in the spring of 2009 is that the market finally began to settle down and when it did, it began this almost six-year odyssey of upward travel, one filled with adventure and thrilling moments to be sure. This latest bout of market instability is just one of the many seen over the last six years.
Funny thing, though, as I travel down memory lane, I remember the big boogey man back in the spring of 2009 being Europe, Greece in particular. My-oh-my, how the circle does turn. Greece is back in the news, as is Europe, and both seem to be driving the current swings in the market, at least to a degree, well, maybe a large degree.
- Stock markets around the world rallied on Tuesday while the U.S. dollar fell after the new Greek government dropped calls for a write-down of its foreign debt, easing concerns about growing instability in the euro zone.
Aside from the global markets feeling a bit of a glow from the lightning-speed backtracking of the left-wing Syriza party that won elections just over a week ago, the important thing to note today is the US dollar doing a bit of backtracking itself. This is good news for the market, as it is good news for US multi-national corporations and US exports.
Going back to Greece for a moment … I am always fascinated by the lack of understanding the general voting public has about reality. Oh, I don’t just mean Greece. I mean all the voters everywhere. It goes like this. Most folks vote for politicians that say what it is the voter wants to hear. It does not matter if what they hear will never, ever happen. The pandering to their perceived needs and wants is what is important.
In Greece, for example, Prime Minister Alexis Tsipras won his election and he dragged his left-wing party into power based upon his tough talk about ending the “austerity and humiliation” for Greece. He said he would roll back the EU debt program and quit the Eurozone if the EU did not get on board with his plan. Well …
New Greek Leader Softens Rhetoric On Debt Talks With Europe
See what I mean? The decent and good folks of Greece do want an end to austerity, and they should get it, but writing off Greece’s debt and leaving the Eurozone are not in the best interests of what the good people of Greece want. That action would be absolutely contrary to them getting what they want. The new leader, Tsipras, knew and knows this. He simply said what they wanted to hear and now he is acting according to reality – Greece has to tow the EU line, even if the EU makes it just a bit lighter somehow.
In any case, the US dollar is down, the market is up, and so is oil. About the latter …
- Although the bigger picture bias and large degree trend will remain pointed downward while price is under the 55.00- 56.76 resistance zone, the near-term is suggesting that a test of these nearby resistance zones is likely underway.
Keep your eye on the price levels, as the move today just might be a temporary bounce.
Trade in the day; invest in your life …
