Monday Morning Musings
The market is nicely higher in early trading, reversing most of Friday's selloff.
There isn't much in the way of market moving news. The big news was the new capital requirements for large banks that came out of Europe. The increase in capital requirements appears to be less than was feared by the market, and as such financial stocks are rallying and leading the action so far today.
Asian markets were mixed overnight, and Europe is higher this morning. There is some optimism ahead of the important vote in Greece about adopting its 5-year austerity plan that was established last week. The vote will come early Wednesday morning in Greece.
The euro is bouncing today, while the dollar is a bit weak. Commodities are also lower, with oil prices down near $90.65 and gold prices trying to hold the $1500 level.
The 10-year yield is up a bit to 2.88%; and the VIX is roughly flat at 21.1. I would like to see the VIX down on a day when the market is up, so we will have to see if this rally can hold today.
Trading comment: The S&P 500 is once again bouncing after nearing its 200-day average, which currently resides near the 1264 level. I hope that the market can continue to lift, as another test of the 200-day might not be successful the third time around. Of course, a lot will hinge on the vote this week coming out of Greece. Sentiment is still bearish enough, that a positive vote could lead to a further rally in the market. But if we get a disappointment, and the vote fails, it looks like the market would break down below this 200-day level and test the March lows of 1250.