Market closed in positive territory for the week. While I think we might be putting in a bottom here, having 65% of the portfolio invested is a bit overweight considering that the market is not out of the woods yet and Greece is having elections over the weekend. As Jim Cramer put it, “while we are likely to get more certainty around the Greek situation this Sunday (although there is a chance that there is no clear winner, a situation that would lead to a third election), many structural uncertainties remain. In Europe, the issues include unknown austerity plans, growth measures and a much-needed FDIC-like program for its banks. Meanwhile, we could see a slowdown in China and a decelerating U.S. economy. Global easing would help the situation, but we need longer-term growth plans in Europe, continued easing in China (which we believe will happen) and a much better job growth plan in the U.S. (making our elections that more important).” With all of this being said, I still have my theory that the markets are controlled by HF trading. The markets bounced off the 200, then found support on the 20, but now we are approaching the 50. So whatever happens next week, when the market rallies Monday, which it will because the news out of Greece was indeed positive, it will be faded by sellers. Not only will problems remain in Europe, but technicians will probably use the 50 as an excuse to sell and book the profits from last week. I was probably a bit early on Friday buying some weekly puts, but I had to have some insurance on just in case Greece wanted to pull a fast one. As we near the 50, I too will fade the rally by purchasing more weekly puts- for a quick trade. Bold prediction: I think the markets move higher next week, despite the slew of data ahead.
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