The collision of global markets and social mood

Monday, June 29, 2015

Monday -- The Unexpected

ES Futures:
Down sharply overnight yet have climbed back inside the recent trading range.

Context: -1% . . .

Note that the September contract -- ESU15 -- did not break the May swing point which equates to 2067.93 on the cash index, yet the continuous contract has.

Tsipras surprised the markets with an unexpected referendum proposal. This should remind people that the Greek situation is bigger than most think.

Take 350 billion euros in Greek debt, securitize it, syndicate it, and otherwise lever it up to a post-Lehman 20:1, and soon you're talking 7 trillion of exposure. God only knows who is holding it.

Nothing out of the ordinary yet. JPY stronger though -- always a red flag to me.

Well bid on safe haven flows, but coming off. Price gains not holding their best levels.

WTI crude back down to the 23.6% Fib level, backtesting this? NG looking precarious thus far.

Not much joy in gold. 1182s

S&P Outlook:
It appears the market may be in "C" of the ABC down noted last Thursday.

Potential also remains for a larger ABC down to 2067.29 which would just undercut the earlier 2067.93 swing point by a few ticks and likely trigger a tremendous number of stop orders. Something to consider.



In other words, today or tomorrow are key days. Perhaps an equally unexpected news development could occur (a sudden deal?).

If no reversal occurs, the market may be in the larger fourth wave down to the 1800 level at least. Will need to manage recent adds in SSO and SPXL carefully.

2039.69 is the far more important level to watch near term.

In hindsight, VIX gave a pretty good sell signal.

Meanwhile, from a social mood standpoint, here are two reasons why I continue to think today's mini-crash is a smaller fourth-wave warning rather than evidence that we're headed directly to 1800:

Yet, we may want to file this one for use in a few weeks. It could be more bearish than anything; if space is suddenly not working out, we may have a problem.

SpaceX explosion delivers blow to Elon Musk’s ambitions

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