Winning

Winning

Sunday, July 5, 2015

It doesnt look like an up day tommorrow, futures down

As the vote is currently coming across that the Greeks are rejecting the debt sanctions proposal by the EU, and that that vote is a resounding "NO", the markets are already reacting to the news. I see the Dow and NASDAQ futures hard in the red.
This is not how I thought this was going to go, I thought there would be a temporary deal or an accord reached on Monday and that the market was going to rise.
We have 4 items open right now, all of which depend on an up day. If the markets are going to drop, it will drag these down with them.
However, I have read at multiple sources that Europe does not want Greece to leave the union. After Sundays Greek vote there are emergency meetings set in Europe. I think that they are going to hammer something out Wed or Thurs and the market is going to react and jump up.

Why am I thinking that?
1. Human nature and negotiating tactics. In college I took a business negotiation course. Most of the work comes after everyone is exausted and tired of posturing. That time is now with Greece and the EU. The EU drew a line in the sand, Greece walked over it, and the EU blinked. Now they are going to have to come back to something to keep the union solvent. And all the while keeping emergency funds attached to Greek banks or they defiantly will leave the union and start issuing new IOU currency. Sounds like the German Mark in the 1920's. This will have a large destabilization factor for both Greece and the EU.
2. Timing issues. Eu comes up with a demand. Greece votes no way, we are about to leave, Europe says hey wait a minute, maybe we can work this out, then boom, a redesigned proposal that makes the Greek Prime Minister looks like a hero, and the EU looks good because they stopped them from leaving.

So instead of the timing being this Monday, now its looking like Thursday. So what is going to happen early in the morning tomorrow? A bunch of market orders to sell are going to pile up overnight so that in the morning the markets are going to open way down. There might even be a gap fade after the first 30 minutes then a slight bounce.
From a contrarian perspective, its too late to get in and buy puts. The time to do that was last Thursday when the prices were better. The drop is already coming and will happen in the morning.
So what am I going to do about this? I am simply going to hold my 4 positions and then at about 1045 look at all the most up lists for the day and find overreactions to the upside then purchase puts. I expect the market to be down Tuesday as well.
After watching the Greek situation very carefully on Monday and Tues I might get in for double downs if I feel the market warrants it and the technicals are near the bottom and I feel that the vote is going to go the Markets way with Greece by Thursday.

It is a watch and see game, but I know the skeleton outline of the next 3 days and I have a basic plan. Now I wait, watch and execute. Of course, at any time suddenly a deal goes through, things will jump.

Tradinginsider

0 comments:

Post a Comment