When it finishes at the lows, there's always the threat of the market opening higher tomorrow. Just as I abhorred the opening today, I will despise anything but a horrendous opening tomorrow.
That's because there are so many people who want out now and so many who want to get out before the denouement of Greece and the employment number that you can't trust any rally other than from a deep discount.
I recommended biotech tonight on Mad Money before the gigantic investment that Celgene (CELG) made in Juno (JUNO). But those are the kinds of stocks that we are going to be looking at to tell us what to do.
It is really important to remember the cycles of declines for all but systemic risk downturns.
Day one, everything goes down and all rallies fail.
We had that.
Day two, we try to rally and we fail again and we go down hard and all sorts of levels get violated. Then money that has been taken out of other areas gets reapplied to new areas that have nothing to do with Greece. Watch biotech. Watch Kroger (KR). Watch Home Depot (HD). The emphasis is on watch, not buy, because things are way too fluid to make a real judgment.
Remember that we have hedge funds that are selling other things now that they realize they can't get out of Puerto Rican bonds anywhere near where they thought they could. They have angry investors who don't like surprises. So they either have to raise money by selling them and saying, "I screwed up." Honest but unlikely. Or they sell good stuff to buy bad and average down on the Puerto Rican bonds.
Far more likely, because the desire to do the wrong thing is ingrained in so many hedge fund managers who aren't seasoned.
So by the end of the day, we will have a good lay of the land.
Normally, day three is buying time for a select group of stocks that are not economically sensitive, but we have to watch the bond market, the European bond market, the dollar, the price of the Puerto Rican bonds and the projections for the employment numbers. That's a lot on the dashboard while waiting for the big-kahuna IMF decision to put Greece in default.
The more people come around to the view I have been articulating that the Greeks were not dealing in good faith, the more we can bounce when something is finalized.
At all times, this is about Europe, not us. But there are so many people who only remember Lehman that they are sending in the cavalry when the EU has tanks. However, the EU is like the UN -- it has many voices and the predominant one hates Greece now.
Remember, keep telling yourself -- settled in euros or settled in drachmas. We don't know which.
The moment we do, the market goes higher.