Overnight

First lets start with yesterday's close, something was certainly up after the market had held all day below the traders favorite intraday moving average right up until the closing action...

If you don't already know what caused this bout of buying, it was the Sewing Circle once again...

Reuters reported that of all people, Greek Conservative party leader, Samaras (the same who said the terms of the bailout would be renegotiated after April elections the day after voting for the terms and truly upsetting the Troika in delivering their "Sum of all Fears", that Greece once again would not do as they pledged) was to deliver a letter commitment, presumably the same letter of commitment that the Troika didn't receive and therefore cancelled today's Finance Minister's meeting. That was it, that was the news that sent the market higher in to the close... As for the rumor, true to the EU Sewing Circle rumor machine.

Overnight though, the sewing circle didn't end...

Overnight ES had its own pop, this time the same old rumor that has been floating around since before the EU decided to leverage the EFSF, which also sent the market higher only to see that plan fail miserably. The story?

From Reuters:

"The head of China's $410 billion sovereign wealth fund CIC brushed aside a call by German Chancellor Angela Merkel to buy European government debt, saying such investments were "difficult" for long-term investors.

In comments ahead of a China-EU summit starting on Tuesday, Lou Jiwei, chairman of China Investment Corp (CIC), said any fresh injection of funds into Europe would be in industrial and other real assets, not government bonds."

The rumor did its job, even though 2 days ago China was taking action to try to bailout their own struggling banks...

Then this morning...

GREEK CONSERVATIVE PARTY SAYS POLICY MODIFICATIONS "MIGHT BE REQUIRED" FOR IMPLEMENTATION 


This latest news is precisely what sent ES down from its overnight highs around 7:40 a.m., this was promptly followed up be news from the German Finance Minister minutes later, that despite reports the 
Greek letter had been sent, WITH SAMARAS'S SIGNATURE!


Next up in pre-market...


SCHAUBLE: SO FAR THE NECESSARY DOCUMENTS FROM GREECE ARE NOT PRESENT


The Euro's reaction?

 As usual as the sewing circle rumors, I mean news, see their half life decline with each passing week.

However, it doesn't stop there, minutes later in premarket:

EURO ZONE FINANCE OFFICIALS CONSIDERING PROPOSAL TO DELAY ALL OR PART OF GREEK BAILOUT YET STILL AVOID DEFAULT

This put the Euro at fresh lows on the week.


As of right now, ES has retraced nearly all of the post China Rumor story...

And so we move forward from here. I would recommend caution on any news/rumors (especially when they come from unnamed official sources) as these have time and time again sent the market higher only to see it retrace the rumor upon the rumor being refuted, usually in a few hours, but no more then a day.