We have classic gap-and-collapse action this morning. The news that the Greek vote may not go forward is overshadowed by fear that investment bank Jefferies Group (JEF) might turn out to be the next MF Global (MF). CNBC is reporting that JEF's net exposure to European sovereign debt is just $38 million, and the company says it is actually net short the PIIGS (Portugal, Italy, Ireland, Greece and Spain), so it seems the fear is overblown.
But we heard similar things about MF Global, so many folks are selling first and asking questions later. Unfortunately, the run on a broker can occur based on this sort of talk and many will sell just to be safe.
It goes to show how emotions generated by headlines drive this market. It is not unlike the chaos in the fall of 2008, and it is keeping many folks on the sidelines. If we can stabilize now the dip buyers may inch in, but the early buyers were burned and they are going to be a bit gun shy now.
Breadth went from extremely positive to negative and we have mixed sector action with gold and oil leading while retail and banks lag. There continues to be very little leadership, especially as key names Apple (AAPL) and Google (GOOG) aren't doing much.
I'm trying to get some trades going but the choppy action is challenging. I added Richmont Mines (RIC) on strength in gold, and I'm watching Web.com (WWWW) for a possible run into its earnings report tonight. C&J Energy Services (CJES) is on my bottom-fishing list, but it still needs to prove itself. Majesco Entertainment (COOL), which I mentioned yesterday, is breaking out this morning.