This is definitely a possible catalyst that may spell an end to this rally but we need to see how US indexes close. I personally think this negative news will have legs and shorted ES futures at 1166. Also went short DAX and Eurostoxx futures. Market moved against my position shortly after bottoming at 1162 but I would expect a re-test of 1150 and then all depends on whether more bad news is coming out or whether that low holds. But there is no doubt this is significant news for Europe. Greece has a lot of debt to roll over, Italy also tremendous amounts coming up soon. Do you seriously think thats good for their yields right before the auctions? My stops are at a June ES equivalent of 1170. Will adjust my stops down should we break down from here.
How would this contagion mechanism work, according to the domino-theory? I just don't see it. Right now Germany (and France - they have better PR, so they are not mentioned all the time, LOL) is benefiting handsomely from the Greek 'crisis'.
It can be similar to 1992 when "The Market" was gunning for one country after another culminating with the British Pound Meltdown. This time, there is much more money involved. We'll see. :eek: