In a shocking turn of events, Greece has put the adoption of the bailout plan up for a public vote. The outcome of that vote 10 weeks from now is anything but certain. Until that clarity emerges, it will be hard for US stocks to advance beyond the highs made last week.
If the Greeks approve the deal, then we should see the positive momentum for stocks resume.
If the Greeks vote down the deal, then it may simply be to get a better deal squeezed out of the Eurozone partners. That may indeed happen, followed by upward movement in stocks.
If the Greeks vote down the deal AND no other deal emerges, then it will likely be a disorderly default with massive losses in European markets with waves of pain hitting our shores as well.
My guess is that we will be stuck in a trading range between the 50 day and 200 day moving average (S&P 1189 to 1274) until this is resolved. And during that time the market will probably overreact to every glimpse into how the Greek citizens will vote.
Best buckle up for a bumpy ride.
More Zacks Investment Research Articles to Put Greek Situation in Perspective
• Buying on Greece Going Rogue
• Greece Holds Euro Deal Hostage
• Euro Dilemma, In Depth
Other Featured Commentaries on Zacks
• The Techno-Fundamental Edge
• What's Your Stock's Price Target?
• Aggressive Growth Stock Picks-Nov. 1, 2011
Click Here to Review the Profits Run Portfolio Prophet Trading Results