To add insult to injury on a tough day of trading, the ECB decided to make a news announcement regarding Greece in their debt negotiations. According to the announcement that came at 3:35 pm, Greece will not be allowed to use their Government bonds as collateral. Well if they cannot use bonds as collateral, then what will they use?
Forgetting that point, why would the ECB make this announcement at about 10:00 PM their local time? Perhaps it is negotiation tactics, perhaps they wanted to float this out to the US market to see how it plays out. I am not sure we will ever know the answer, but our markets reacted swiftly by selling off, but perhaps not as much as we might have seen had it been earlier in the day.
Oddly enough, this news came just as the SPDR S&P 500 (ARCA:SPY) and PowerShares QQQ (NASDAQ:QQQ) were hitting the top of the range and as we were watching Crude Oil sell off also. Bottom line is that tomorrow will be a very interesting day.
My gut tells me we test the bottom of the range soon and I am positioned for this to happen. Something smacks of a broken market here, liquidity is dried up and the markets are trading with huge ranges.
I think the market wants to sell off and we may have our catalyst with the ECB news.
Sleep well, although I will be waking up at 2 am ET to check out the futures.