It's 2:50 AM on the east coast, Asian markets and European market futures are trading higher on the Greece deal. China inflation may prompt government to provide stimulus. S&P futures and commodities are pretty much flat. There is dollar strength in anticipation of good US Non-Farm payrolls and February Unemployment rate data. I feel like a kid on Christmas Eve who cannot sleep in anticipation of what lies beneath the tree.
The Greek debt swap deal was successful yesterday and Germany has returned to growth. Go Europe! The world awaits the US jobs data.
Standing on the threshold of the February US Employment situation is like approaching a traffic light while driving your car and it is currently, green. Can the US economy reach the intersection of Continued Economic Recovery Rd without the jobs data giving us a red light?
If the US Employment situation and jobs data is good and the data not already baked into price, the SPY has clear air up to May, 2008 highs before running into major resistance. That is the bullish view on the market.
On a larger timeframe, Q1 2012 earnings season is rapidly approaching. Downside protection using options and buying volatility may be prudent strategies to protect existing long positions. Refer to yesterday's blog regarding the blue light special sale on volatility. Volatility is anemic given the band-aid just applied to the European debt situation. Volatility prices can best be analogized as having the same fate on the discount rack like a winter coat in New York. Tick-tock Tick-tock
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