"All paid jobs absorb and degrade the mind." -- Aristotle
The headline this morning is that Greece has met the terms of its bailout agreement with the completion of the bond swap. We have rallied in anticipation of this news at least a dozen times, but now it's a done deal and the question is whether it will generate some sell-the-news action.
In addition to Greece, we have a very important monthly jobs report coming up. With the market running straight back up after aggressive selling Tuesday, when economic growth concerns emerged, the bar is set high and any disappointment is going to generate reflexive selling.
The market continues to repeat the same pattern that has been so prevalent since the bottom in March 2009. We have very strong underlying support and, after a one-day correction, we immediately bounce and go straight up.
The bounce after a bout of selling always attracts bears looking for the indices to quickly rollover again, but when that doesn't happen they turn into short squeeze fuel and keep the market going.
If there wasn't any major news this morning, I'd look for the upside momentum to continue, but the completion of the Greek bailout and the monthly jobs news makes for an ideal sell-the-news situation. The Greek news in particular was extremely well anticipated and according to SentimenTrader.com, the S&P 500 has closed lower on the day of the jobs news eight of the last nine times, despite some better-than-expected reports.
Even if we do dip initially as the news hits, the biggest mistake you can make lately is underestimating the power of the dip-buyers. They have had so much success for so long that you have to anticipate that they will continue. If you are looking to short, you should be focused on playing failed bounces and new intraday lows.
Let's see what the jobs news brings and we'll take it from there.
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