Quick Update

I can't stress enough that today is all about Greece, the news that a final draft between the Greek PM and the Troika was being put together sent the Euro higher, correlations have been pretty strong as you saw with GLD/SLV and as you will see with the SPY. The market seems to understand that a draft document is not an agreement, the real fight will be later today when the Greek coalition ruling party members meet to either accept, reject or counter-propose what is contained in the draft, I'm actually a little surprised that the market reacted as positively as it did to a draft of conditions being drawn up, there's no real news there and as was noted yesterday by the EU, they are past the deadline. To get the money Greece needs in time, it will take time to get the PSI debt restructuring deal done, agreement itself will not pull Greece out of the fire, there is a time component and if they get the bailout tranche, but 1 day too late, Greece still defaults.

 The SPY compared to the Euro intraday, very similar to what we saw in GLD/SLV. There was an RSI divergence and for the time being, it seems likely that the market will tread water awaiting further developments.

on 1 1 min 3C chart we see early confirmation of the move off the lows to above yesterday's close (white trend line) and since 3C has fallen off as the market has lost upside momentum with the Euro.

Not much makes a whole lot of sense in sector rotation this morning except financials due to yesterday's start of pre-announcements, essentially lowering the bar for the quarter when we are only 1 month in to the quarter. Tech seems to be the strongest thus far of the 3 major groups, it also has the least correlation to the Euro. Interestingly, we are seeing some strength in rotation in Tech, but at the same time in the very defensive utilities. This is what I meant when I said rotation this a.m. doesn't make a whole lot of sense.  Energy makes sense considering the FX correlation and the recent loss of momentum in Euro upside/dollar downside. Interestingly, Industrials are way off.

The bottom line appears to be a holding pattern. I'll be watching for any unusual activity in this area as it might be an early heads up of things to come.