Hang Seng is down 800 pts and the Nikkei was seen lower by 235. Gold is lower as well by 24 bucks as of 12:37 AM PST. Dow futures are lower by 175.
7:00 AM Update
Well, it looks like Merkel and company might be finally facing up to the reality that Greece cannot be saved and is preparing her banks for such an eventuality.
"Officials in Merkel’s government are debating how to shore up German banks in the event that Greece fails to meet the budget-cutting terms of its aid package and is unable to get a bailout-loan payment..." said a Yahoo article.
Also, French banks may get their credit ratings cut by Moody's. This is exacerbating the French CAC's decline.
"BNP Paribas SA, Societe Generale SA and Credit Agricole SA, France’s largest banks by market value, may have their credit ratings cut by Moody’s Investors Service as soon as this week because of their Greek holdings," according to Yahoo.
Stocks are recovering however from overnight lows as bargain hunters swooped in looking for deals. It looks like we made a nice bounce from the lows overnight and could be headed back up to 1200 as this trading range continues.
The Dow is down 24 pts, the tech heavy NASDAQ is up 17 pts and the SNP 500 is up 3 pts. Gold is down 20 dollars and oil is down 60 cents. The French CAC is down 3% and the DAX is down 2% but are well off their overnight lows.
Stocks I'm Watching
Gold- Gold is down almost 3% as it once again pulls back from resistance. The baby is getting thrown out with the bathwater here as stocks are down as well. Dennis Gartman speculates that with stocks dropping, people are getting margin calls and so are selling their winners which includes gold. I am still long Gold and will stay that way.
IWM- Small caps are outperforming today which could signal a rally coming up. I have been watching small caps as a sign of risk appetite returning.
Goldman Sachs- GS dropped below 100 for the first time since 2009. Financials are performing horribly again. The market can't go anywhere unless the financials get their act together.
Euro- The Euro is up today after crashing last week. It got up to 1.37 vs the dollar before selling off. Greece is likely to default and take the Euro down with it. EUO is a levereged way to short the Euro.
I am not too confident on the short term direction of the market right now, so I will just sit back and observe.
6:58 PM PST EditWe had a huge surge into the close on good volume. Apparently, China is negotiating with Italy to buy some of their bonds. It seems China does not want the Eurozone and the Euro to fail either. China had been buying Euro's and european bonds earlier in the year in an effort to stabilize the currency and the economic situation. This bodes well for stocks tomorrow and we could rally from here. I went ahead and purchased a small amount of large cap European stocks for my long term portfolio today via HIINX.