Enis’s Macro Wrap – What if Greece was Fixed?

by Enis June 18, 2012 7:37 am • Commentary

Dan, CC, and I have had frequent discussions over the past week about our trading strategy over the next month.  We all recognize it as a particularly important period for traders given the headline-laden environment and the many potential catalysts.  One mental test I like to employ for emotionally-charged events like this weekend’s Greek elections is the following:  what would I do as a trader if there was no event?

In other words, how would I want to be positioned assuming it was a quiet, generic weekend? And that test near the end of last week forced me to keep my risk-off positions, even though my emotions were a bit frayed as the market rallied.  My main macro indicators tell me the following:

As you can see, the bulk of my market “tells” are still flashing warning signals.  Sometimes it’s best to ignore the headlines and listen to the market.  The market seems to care much less about Greek elections, and much more about Spanish and Italian solvency as well as slowing emerging market economic growth.