Greek Deal Close – Don’t Expect A Massive Rally Through the All-time High

July 1, 2015
Author: Peter Stolcers, Founder of OneOption

LEARN HOW TO GET THE PLATFORM FREE and get my market comments before the open. Posted 10:00 AM ET - It appears that Greece is close to signing a deal and we could see an agreement as early as today. The 200-day moving average held and we are likely to see a nice relief rally this morning. I'm not expecting us to challenge the highs even if a six-month deal is announced. The Greek saga will continue. A deal will prevent a default, but riots will breakout. Greek citizens will vote to stay in the EU or to leave it this Sunday. As I've been mentioning, any Greek related decline is be a buying opportunity. The market is pretty comfortable with Grexit knowing that credit concerns are contained. China's market was down 5% overnight. Margin loans at brokerage firms are larger than expected and the selling pressure has been heavy. ADP reported that 237,000 new jobs were created in the private sector during the month of June. This was better than expected and tomorrow's jobs report should be in line. Earnings season will begin in a couple of weeks and that will attract buyers. I will look for some bullish put spreads today, but I won't enter many. I still don't trust Greece and I don't want to risk exposure over a holiday weekend. When a deal is signed, I will feel more comfortable. I've been encouraging you to stay sidelined during this ordeal. There were day trading opportunities, but you had to be nimble. Anyone who held overnight shorts is taking a beating. I will be day trading from the long side today. Ideally, I will find stocks that broke out and pulled back slightly during the market decline to retest that breakout. If the breakout was preserved, the likelihood of a rally is high. Look for these types of setups. Facebook is a good example. If Greece signs a deal during market hours, I might hold these long positions overnight. Otherwise, I plan to take profits today. Look for a gradual grind higher today. The momentum should build throughout the morning as long as the news from Europe's positive. . . image

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