The reason is the season, silly season or politics. It was just Sunday that PASOK said they would not form a coalition government with the New Democracy unless Syriza was in it too, which as I mentioned last night, is beyond highly unlikely. However today PASKOK has already flip-flopped and is now willing to explore the possibility of a ND/PASOK coalition, you see what I mean, total 180 degree reversal within less than 24 hours, expect a lot more, especially as Greece tries to renegotiate with Germany-good luck there.
Watch Italy very close this week, we know Spain is in trouble, but there are troubling proposals that are about to be floated with the EU finance ministers, Italy may be much closer to the edge than most realize. If Italy and Spain sink at the same time, it's game over; it's not really a matter of "if", but "when" and this is why I decided a month ago to keep my core shorts intact, the Black Swan that pops its head up on some quiet Tuesday morning.
Egypt will also be very interesting as a technical win for the Muslim Brotherhood in elections WON'T be allowed to stand, the military has retained the reigns of leadership since Nasser, they are not about to be told what to do by the Muslim Brotherhood, this could be well beyond an economic event, this could be a flash-point in the MENA region.
Another HUGE event will be the June F_O_M_C announcement Wednesday, it's time to really start paying attention to how gold behaves, we may very well have an answer to why the positive divergence on the 30-60min charts has been in effect since before the SPX made its last low. Remember that there's almost always an initial knee jerk reaction to the policy statement and it is almost always wrong.
However, this chart is what got me started on this post, ES tonight, once again looking a bit scary.
That's a nasty leading neg. divergence in ES. Last night's was spot on, we still have a long night, but this doesn't look good and may explain the shorter term 3C charts today suggesting a pullback.
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