Markets worldwide rallied yesterday on the news of an agreement being reached between Greece and its European Union creditors. Greek Prime Minister Alexis Tsipras, after months of taking a hardline anti-austerity stance, finally capitulated and gave into the demands of his European counterparts.
While the summit agreement may have quelled the fears of a Eurozone exit by Greece for now, there is still much to be done to make this process appear even somewhat orderly. Most immediately, the Greek parliament must pass these new measures into law by Wednesday. No easy task as just last week Tsipras held a referendum to which the country voted a resounding "no" to measures seen as much less harsh than these latest terms. Digging up the necessary support to pass the agreement into law is going to require a good bit of political creativity by the Prime Minister and may ultimately cost him his job.
Bloomberg was out
yesterday with a helpful timeline of the deadline's that must now be confronted.
This continues to be a fluid situation and isn't a 100% certainty that the deal in its current form is signed, sealed and delivered. If you look at the action of the market in recent weeks, we can see that the rally over the last 3 days was an exhale of relief that a Greek catastrophe will be avoided. Those worries have been tabled for now and we're seeing the type of light-volume bounce that's been a familiar theme in this bull market. These quick sell-offs have tended to be on higher volume only to end in a V-bottom that ultimately slingshots us back up toward the top end of the range.
We'll see how, and if, the timeline above impacts the future direction of the market.
