With the stock market's recent rise, our intermediate-term (overbought / oversold) stock market indicators have turned slightly bearish near the close on Friday. We last posted a stock market indicator update on May 21, 2012, when the S&P stood at 1308. The S&P closed on Friday at 1342.84.
- Based on market action, our intermediate models are slightly bearish.
- Our long-term model is bullish.
- Net-net, that leaves us slightly bullish. As usual, short-term market action and models also dictate our market positions.
In addition, with the financial markets bracing for volatility -- based on the Greek elections on Sunday -- we took this as a welcome reprieve to be flat in markets (that are highly correlated to the situation, such as currencies and equity markets).
CNBC.com had a nice summary of the Greece elections on Sunday. For entire article, please click here:
Greece may be a small country, but its vote this Sunday may be the most important in the world this year.
PNC | Brand X Pictures | Getty Images
While the June 17 election is not directly billed as a referendum on Greece paying its debts and staying in the euro, its might as well be. If no party wins enough votes to form a coalition, as with the last vote, then the Greek situation may very well remain as it is now – a jumbled mess of no real leadership, no real plan and perhaps no real way to stay a member of the euro zone economic family.
Though seemingly complicated, this Greek drama is actually quite simple. In a nutshell:
- Greece could run out of cash to pay its bills by the end of this month, thus...
- Greece needs a bailout, however...
- Greece likely can't get a bailout without agreeing to tough economic oversight (aka "austerity"), and...
- Greece can't agree to anything without a majority coalition government, but...
- Greece doesn't have a majority coalition government, thus...
- Greece needs a majority coalition that wields the necessary power to push an austerity/bailout plan through.