It's not that Greece is all-important. It is that Greece does matter.
Last night on Twitter (@JimCramer) I was amazed to see how many people were furiously saying that Greece doesn't matter, that it's irrelevant.
That's all well and good when the Dow and the S&P are flat, when everyone thought Greece was the be-all and end-all, but it's not so good after a run if we say on a day like today, "Uh-oh, Nouriel Roubini, the sage who told us to worry so much about Greece, is all-in for U.S. equities, and you can't have a negativist like Roubini be so positive now -- after 6,500 points -- UNLESS it is wrong." You needed Greece to work out perfectly to make that guy right.
Why could it matter? First, we need to see the euro stay strong. This quarter, foreign currency weakness was responsible for a lot of misses, but we looked the other way because the dollar had started to go back down vs. the euro. That trend can reverse on this news -- as we all know, Greece doesn't belong in the eurozone in the end. This whole exercise has been a disaster for everyone because, unlike Spain and Italy, Greece has historically been a total welfare state, overwhelmed by indigent immigrants and not paying its own freight for years and years.
Can you blame the Germans for wanting more assurances knowing that Greece has made them look like fools for more than a year now?
Second, and perhaps more important, the market has not given you enough reasons to sell off so far this year, therefore extending pretty much every chart in the book, but particularly the financials.
As our own Carolyn Boroden, a technician with real savvy, has been saying, the SPDR Financials (XLF) among all indices is the most exposed and therefore the most due.
How about this as a strategy? Expect the fact that people are going to sell into this one and let's just watch Wells Fargo (WFC). In the last few weeks, WFC has delivered a great quarter, gotten the settlement we have looked for, taken a ton of share from Bank of America (BAC) in many areas and made it very clear that it has the least Europe exposure of any major bank.
I have been looking for a reason to be able to push this one hard again. It's 9% of the XLF. When the negativists come in, this one will get hammered.
In a year devoted to actual stock-picking, this would be the one to bottom first. It is therefore the name to watch if the profit-taking begins and we get a real raid on the financials, because down a couple of points it might just be the best stock to own going into a housing recovery.
Random musings: I am going to shoot the first guy who brings up the unrigorous risk-on, risk-off gibberish, as that's something that got created as pure hedge-fund speak and it makes you no money whatsoever. This is a year where stock-pickers are taking the market back to its rightful owners, and those who play that risk-on, risk-off game are fools.