The big news of the day was Greece again with bond yields rising (10yr 7%) and CDS spreads increasing to year highs (383 bps) as uncertainty reigns supreme. An interesting tidbit regarding Greek bond yields is the spread between the 3 and 6 month bills which increased to a record 250bps. This is highly irregular and indicates extreme problems in Greece. For comparison US 3-6 month spread is only 9 bps.
But you would not know this acute situation by looking at the equity markets which closed slightly higher for the day after briefly falling in the morning session. Oil was flat to slightly higher at $86.83 and gold closed higher at 1,135. Again oil was able to shrug off poor API inventory numbers indicating an increase of 1+ million barrels for the week (it seems that the more the inventories increase--the higher the price--screw demand/supply). This is in spite of continued dollar strength which rallied against most currencies.
One would think that the situation in Greece would be cause for concern but markets seem completely unaffected. As I have said before, markets are extremely overbought and do not represent a good entry position for establishing new positions. I am currently waiting for a pullback to at least 1150 on the S&P500 before buying anything.
Black Swan Insights