Art Cashin On "Voting And Volatility" And A "Zany Day"
As usual, nothing but pure concentrated essence from the Fermentation Supercommittee Chairman
Voting And Volatility - The markets continued to be roiled by the possibility that Greece may hold a referendum on staying in the Euro-zone. That referendum could delay or disrupt the bailout proposal that had sent markets soaring last Thursday. The confusion surrounding the vote produced whipsaw action in negative territory and more than a few nailbiting moments.
Stocks opened with a sharp gap down induced by heavy selling in Europe. At the time we opened in New York, Italy was down nearly 900 Dow points and looked like it might crack wide open.
The S&P opened around 1220 and traded anxiously and intensely at that level for the first ten minutes or so.
When they held 1220, a few nervous buyers showed up and a mild rally evolved. They managed to get back to a nudge above 1230 by mid-morning. Then they began to roll over as rumors swirled about.
By noon, they had drifted back to the support band at 1214/1217. They pressed against the band about six times over the next ninety minutes but never broke below 1215.
About 1:30, a headline hit, quoting an unidentified “Socialist minister” in Athens, saying the referendum idea was dead. The Dow shot up 120 points in a matter of minutes. The S&P shot back up to the morning highs (circa 1232).
Then for 90 minutes, they churned nervously sideways unable to break out of the range. The background for all this were more rumors and headlines on who was meeting with whom and when and where.
In the final hour, a spokesman for Papandreou said the referendum would go ahead. Stocks returned to the days lows and closed right there.
As a backdrop to all this was the failure of MF Global. They apparently held very leveraged positions in European sovereign debt. This high profile bankruptcy further animated the discussions and concerns about world-wide contagion from the Euro-zone.
And as for the...
Consensus - This sets up to be a potentially zany day. Lots of rumors and meetings. Remain alert and stay very, very nimble