skip to main |
skip to sidebar
Precious metals were under pressure throughout the US trading session. The bear raids started early on Sunday evening but gained footing during the NY trading session.
I think the silver chart *might* be clarifying a bit here, but we will have to see where it finds its level in order to peg the new levels of resistance and support after the parabolic run up which very possibly was a calculated maneuver designed to break the bull market trend before it leads to a Comex default.
Gold was pressured by China weakness and the bears took the opportunity for another raid when SP downgraded Greece to CCC.
The gloom seems rather thick here, and the common sentiment is overwhelmingly bearish. It does seem overdone as we might see at a market turning point near the bottom of a resistance channel.
At the end we have to accept the verdict of the market, at it is deliberately given over time. Always.
But I have to note that those who are quite often wrong because of a fundamental lack of economic and market knowledge are becoming increasingly noisy and emboldened lately, trotting out old tired arguments and worn predictions, and this is sometimes a sign that the tide is turning.
It is option expiration week. Let's see what happens.
Slowdown fears for China and a downgrade of Greece's credit rating put some headwinds into the market that started out on the bullish side based on another 'merger Monday.'
What next? This is an option expiration week, and the bulls are looking for an excuse to rally. They have not been able to find a footing yet, and so the market continues to trend downward despite brief buying flurries with no sustained volume.
The trend will continue until it does not. Be on the defensive here. I am shifting to a more neutral posture until I see if stocks can break down further however.
Interestingly enough, the SP move trails the Chinese Dagong Ratings Agency which cut Greece to CCC on June 3.
Dagong downgraded the UK last month and has cut the US to A+ last year.
Reuters
SP Downgrades Greece, Says Default Likely
Greece on Monday became the country with the lowest credit rating in the world after Standard & Poor's downgraded it by three notches, saying the agency would consider a likely debt restructuring as a default.
A restructuring of Greece's debt -- either with a bond swap or by extending maturities on existing bonds -- looks increasingly likely to be imposed by European policymakers as a means of sharing the burden of Greece's crisis with the private sector, S&P said in a statement.
"In our view, any such transactions would likely be on terms less favorable than the debt being refinanced, which we, in turn, would view as a de facto default according to Standard & Poor's published criteria," the agency said.
In such a case, S&P added, Greece's credit rating would be lowered to "selective default," or SD, while the ratings on the country's debt instruments would be cut to D.
S&P cut Greece's long-term sovereign credit ratings to CCC, just four steps away from default, from B. The short-term rating was affirmed at C and all the ratings were removed from credit watch.
The outlook on the long-term rating remains negative, however, in a sign that another downgrade is likely in the next 12 to 18 months.
Here is the weekly US economic calendar courtesy of Briefing.com.
As a reminder, this Friday is the 3rd of the month, and therefore a US stock market option expiration for June. Shenanigans are anticipated.
The expiration for July precious metals will not occur until the last week of the month on June 27.
