How big effect will(/would) Greek bailout have on Dow?

Discussion in 'Trading' started by Blue_Bull, Mar 13, 2010.

  1. I've been looking for an opportunity to pick up some swing trade on a pull back in the market. My analysis suggested that the Dow would pull back about 5-6 days ago, yet it keeps drifting up.

    I'm not trying to fight the tape, but I do think that a pull back is over due. Also, I personally don't think the Greek bail out is big news (assuming it even really happened). I think it was tough to fathom that Greece would fail/drop out of the EU, and as such the market shouldn't be surprised by a potential bail out.

    On the other hand, I can see the market taking off based on this "good news." In that case, I think I might need to scrap my plan of waiting for the pull back, and reassess where we're heading.
  2. First of all it's not a bailout, more of a backstop which will lower default risk in Greek debt issuance.

    None of the major wires picked it up on Friday, nor did anyone post about it here.

    It's definitely news. Reuters only reported on it today (Saturday) so it's going to have some effect on the open as word gets out from credible wires, plus the "official" announcement is due on Monday according to the articles.

    Sell the news? The sooner this becomes official the better since now you have to live in fear of a massive short covering spike as long as there's uncertainty.
  3. Thanks guys. I was traveling Friday and somehow overlooked the timing of those articles!
  4. It came across MNI on Friday, so I don't know what you're talking about. The Euro jumped when the article hit the wires.
  5. Fine, whatever, problem is if it was widely disseminated Friday we wouldn't be talking about it today. Reuters and DJ didn't run a single story on it Friday.

    I'm heavily short the DAX and EURUSD over the weekend so I hope you're correct this is a non-event, but I think it's foolish not to watch out for a news spike now that this story is making the rounds with an announcement pending Monday.
  6. Match the Euro rally with the time of the release. Anyway, the meeting of ministers on the 15th and 16th was widely discussed. Largarde and a German finance minister have already discounted that Guardian article. The article was prep for the meeting and the bailout was already a certainty:

    EU finance ministers are set to discuss next week whether any Greek bailout should be funded by EU bonds guaranteed by euro-region governments or be in the form of loans from the 16 euro nations, three people briefed on preparations for the meeting said yesterday.

    “Certainly we are not at the stage where we need to opt” for a specific course of action, Lagarde said today. “It’s far too important to force the issue.”
  7. Thank you stock piker, I do see the spike, no question it was out there in part on Friday although it's a developing story. It's all BS and posturing of course, I just want this behind us already, Monday's announcement couldn't come soon enough!

    Here's the latest Sunday piece from Reuters:

    It mentions the hesitation from Lagarde but goes on to say "On Saturday, Britain's Guardian newspaper quoted sources as saying Monday's meeting would agree to make up to 25 billion euros of support available."

    Also Dubai up close to 4% this morning on speculation of government backing:
  8. Gcapman


    YOU may not have picked it up - but the guys with real money already knew about it - you do not count in the grand scheme of things in this market - it is the big boys that matter! Know what you are talking about before you decide to open your worthless piehole next time....:cool:

    PS - there was an announcement last week that the meeting would occur this Monday.....extremely old news...
    #10     Mar 14, 2010