Market Update***

The latest is an offshoot from an offer made yesterday by European Commission President Jean Claude Juncker, probably the least trusted man in Greece (Schaueble, the German Finance Minister likely being the most hated man in Greece). Apparently after Juncker's emotional plea yesterday which can be seen here he sent a proposal without Troika approval which , it is said, the Greek government rejected, then it was said they were considering it again this morning and would submit their own proposal.

That proposal was submitted about an hour ago in which Greece asked for a 2-year bailout via the ESM mechanism, Financial debt restructuring and all within the Euro. The immediate response was Merkel shot down the proposal, you can see it here in the trade of the EUR/USD...

Merkel shoots down Greek proposal.

However moments later, Greek press conferences and various EU engagements were cancelled all at the same time for "Emergency meetings", so it seems there may be something going on. Then the head of the Eurogroup, Dijsselbloem announced on his twitter feed,

This being Europe, events are moving faster than you can type, the EU leaders who apparently are VERY AFRAID of democracy at work have called for the cancellation of the July 5th Greek referendum, saying that talks can resume quickly IF the referendum is killed and that the airing of the Greek proposal can happen only if the referendum is cancelled.

OK, so the rumor mill, the news is insane as expected so we'll continue on with what we see in the market from sources that have much better information than we do.

Last night in the Daily Wrap I said:

"Everything is pointing to a 1-day oversold condition in which a bounce or next day green close is highly probable, however in the current situation, it  would seem some small 1-day reversal process such as a Doji or Star candlestick would be in order and perhaps with that, a positive divergence."

Thus far, looking at the SPX daily chart, guess what...

We have EXACTLY that, a Doji Star/Harami candlestick pattern, a reversal candle/pair just as forecast last night based on the simple concept that reversals are a process, not an event and based on the fact we had no positive divergences yesterday, but a deeply 1-day oversold condition. So the second half of last night's post/excerpt from above are the divergences...

 SPY 1 min positive divergence through today as highlighted on the time axis.

SPY 2 min chart seeing migration or strengthening of the divergence through today once again as yesterday was in line with the downside.

We even have slight migration over to the 3 min chart, but once again, to keep things in perspective...

The 3 min chart zoomed out and the divergence is barely noticeable, that's because that's about the appropriate size for 1-day oversold condition's bounce.

On the 5 min chart, we have a very ugly chart that represents the highest probability/path of least resistance despite any 1-day oversold bounces no matter how strong they might be and that is quite obviously, DOWN.

I could show the QQQ and IWM, but the charts are nearly exactly the same as the SPY above.

The intraday TICK has been between + and - 1000 with a few spikes above and below that range.

And the custom TICK indicator shows a little breadth improvement.

All in all, this is pretty much exactly what we expected yesterday and the reason puts in QQQ were closed, calls in VXX were closed and I am looking to re-enter both positions on some price strength, but before we get that, the conditions as set out in last night's Daily Wrap as posted from an excerpt above, take shape which they are doing now.

As I said earlier, I wouldn't be interested in trading this long unless the signals were unbelievable, the reason is the path of least resistance is also the path that the market will follow if there's any uncertainty in the Greek situation, essentially the smaller/shorter term divergences are much more likely to be run over than the longer, very negative ones. It's not a matter of probabilities because the probabilities say a bounce is probable, it's a matter of a High probability trade, an excellent entry, LOW risk and decent reward ratios. That doesn't exist right now.

However for the moment, we are EXACTLY where the charts pointed to yesterday.