Now we have a deal. To me, the deal is a deal to stop talking about Greece for now, because this is all about austerity AGAIN, and it hasn't worked before.
Will it help our stocks? Or will at least a cessation of "Grexit-No Grexit" for a bit change things here?
Initially it looks like yes, although I am sure that we will just hear today about how it hastens rate hikes here with no growth there.
I can tell you this, though, we need the help -- both from relief of Greece and Greek news and, by the way, from a healthier Chinese stock market (three up days in a row) -- because a look through the charts this weekend shows almost nothing but pain.
This is a market where there is no tech leadership, no real financial leadership and no transport leadership; it is problematic. A market that has relentless declines in anything commodity-based, and I mean declines where you can't even see a point or two lift, is just plain painful. A market that has turned in the industrials can be an abysmal one. And a market that has only scattered members of the health care sector is just a plain mystery.
That's where we are with a Greek deal and with the Chinese market rally, which I think we can now officially acknowledge did give you a great trading opportunity despite the much-derided stopgap measures. I guess the day when the New York Times finally flagged the Chinese stock market crash as the lead story in the paper did, indeed, turn out to be a terrific trading opportunity.
This market has turned on pretty much everything except scattered situations: cable companies, some restaurants, some medical devices, the auto parts resellers and some refiners.
In fact, this market is almost entirely special situation, meaning that something's going on that's going to propel that specific stock and no others.
For example, we know that Amazon (AMZN) ¿ a holding of the Growth Seeker portfolio ¿ has been going up ever since it decided to break out Web Services to show profitability. Netflix (NFLX) keeps going up because we have so few global growth stories. General Mills (GIS), Mondelez (MDLZ) and ConAgra (CAG) are now considered to be takeover targets. Royal Caribbean (RCL) is viewed as the only way to play travel other than Marriott Vacations Worldwide (VAC) as they are perceived as value for the frugal.
No one thought that a video game company ¿ Electronic Arts (EA) -- or a seller ¿ GameStop (GME) --could survive in a digital online world. The health maintenance organizations (HMOs) are being taken over by each other. The hospitals won in the Supreme Court. The drugstores are becoming a fat oligopoly with pricing power.
I could go on and on about one-off situations. The good news is that there are dozens and dozens of them in the chart book.
The bad news?
The S&P's biggest units only have a couple of healthy companies' charts in them, like Red Hat (RHT), Adobe (ADBE), Accenture (ACN) or Akamai (AKAM) in tech, or a Bristol-Myers (BMY), Abbott (ABT) and AbbVie (ABBV) in big pharma or Disney (DIS) in entertainment. There are no bank charts that seem very strong, except for the credit card companies and Bofl Holding (BOFI). It's really a dearth of good charts.
Which brings me to the central question: the damage in this decline seems far worse than any I have seen since last October's selloff and at least then there were some healthy larger groups.
I think that's what we feel every day. The weight of a market that simply has too few stocks that are working, terrible breadth and the over-arching need to find the winners because, more than ever, the winners tend to be totally outsized because they are driven by takeovers and consolidation.
It's treacherous, perilous and ultra-rewarding all at once. But the first two most certainly overwhelm the latter, which makes this market so unsuitable for so many except for the most nimble investors and those who can short commodities with conviction that they will never lift.
That's because they sure haven't for ages, and don't seem to be able to as long as global growth is slowing and the Fed keeps talking about pulling the interest rate trigger -- something that will only accelerate now that there seems to be less panic in China and an austerity deal in Greece.
