Bears to Pounce at the Open
Stocks look to open sharply lower this morning on a variety of news events, although none that are singularly that bad. Greece is in the headlines yet again and frankly, if they are going to exit, let’s just get it over with. Their economy and market is not even a rounding error in the grand scheme of things, but a Grexit will open the door to the southern European countries saber rattling about an exit if they are not bailed out.
The open should put the major indices close to saying “hello” to last Thursday’s low, which is the line in the sand on a closing basis for the bulls over the short-term. On a day like this, I always look closely at which sectors lead and lag. I am most interested to see if the previous leaders are still leading or the previous laggards are still lagging.
I would fully expect to see treasury bonds and corporates rally today along with gold, REITs and maybe utilities. Tech should be under strong pressure given Microsoft’s big earnings miss. Most important, today’s close will be very telling.
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