Greek Tragedy
I’m not usually pessimistic, but I think we are going to see a Greek train wreck before the month is out and a significant sell off in the market. No one can be sure, but this latest bounce is likely to fail…again.
It is all about the European Finance ministers meeting tomorrow. We shall see what they have to say about any possible deal, but it is looking increasingly unlikely.
In this environment all I can do is protect my capital by making sure my stop losses are in place and never moving them. It can be very frustrating seeing the market continually come back after a stop out, but the alternative is worse. This is a long term game, and those that use stops will win in the long term, them that don’t will be forced to stop playing the game.
Market News:
U.S. stocks closed modestly higher on Wednesday as investors digested the Federal Reserve statement and Fed Chair Yellen’s press conference.The Federal Reserve held interest rates at zero and provided only faint clues about when the first hike in nine years might occur. The central bank downgraded the GDP forecast for the year to 1.8-2 percent while raising longer-term growth expectations.
Stocks extended early gains as Yellen said markets should focus on the pace of rate increase rather than the timing of the initial hike.
Stocks traded lower ahead of the release, giving back opening gains.With consensus for a rate hike in September at the earliest, most investors did not expect major policy changes from the central bank’s announcement.
Traders also kept an eye on the Greece debt negotiations ahead of the euro group meeting of regional finance ministers on Thursday.Greek negotiator Euclid Tsakalotos said in a Reuters report Wednesday that the country is willing to make concessions but pension cuts cannot be on the agenda. He confirmed that Athens does not have enough funds to make the debt repayment to the International Monetary Fund due on June 30.
Read MoreWhy should we care about Greece?
The European Central Bank raised the Emergency Liquidity Assistance for Greece to 84.1 euros from 83.0 euros. Greek banks are reliant on this funding and analysts warn that if the central bank curbs this liquidity, Greece may have no option but to impose capital controls.
European stocks closed lower as caution ahead of the Fed and ECB meetings weighed, while Chinese stocks closed higher. Japan’s blue-chip Nikkei 225 stock index ended a touch lower.
Thursday:
Earnings: Kroger, Rite Aid, Red Hat, Finisar, Smith & Wesson8:30 a.m.: Initial claims
8:30 a.m.: CPI
8:30 a.m.: Current account Q110 a.m.: Philadelphia Fed survey