The market posted strong gains on Monday, buoyed by the Greek Parliament's final approval of austerity measures.The S&P finished 0.68% higher, while the Nasdaq gained nearly 1%. The vote, which paves the way for another round of bailout money, can be seen as a positive step in the short-term for the European and world economies, but with extreme civil unrest and major political tensions Greece's future is far from rosy.
The market initially sold off the gap up but did come close to filling it. An afternoon rally took the S&P back to where it opened. Stocks are now in a bit of limbo, as the major catalyst is now out of the way. Investors have been waiting for finality to the Greece situation for some time now, and with its passage there was low volume and volatility today.
What is the next step for the market? Earnings have been solid if unspectacular, US economic data continues to show signs of steady improvement, but Europe remains a major wild card. Without a major catalyst, it is possible that we see more of this range bound, quiet action for at least a few weeks.
Technically speaking, bullish composure remains firmly intact. However, traders were reluctant to pay up after this morning's open, and it might take a decent pull-back for them to regain the confidence to step in aggressively long. The S&P does continue to do constructive consolidation above the new floor, which sits around $133.60-133.80 on the SPY. Strong bull markets often do not provide pull-backs to let cautious traders in on the action, but rather just pause and rotate strength through sectors.
*DISCLOSURES: Scott Redler is long SPY, QCOM, OIH, VMW, LULU, WMT. Short DIA, QQQ.
