Once again, Greece is saved and the market celebrated.
I don’t know how many times we have rallied on similar news, but it sure didn’t deter buyers, and it really surprised the folks who thought we might see a sell-the-news reaction to what seemed like very unsurprising news to me.
And just when it looked like the buying frenzy was out of control, the market dropped a quick 1% into the close.
The big news today was the leaders of France and Germany agreeing that committing to a bailout is "essential for the Greek economy to return to a path of lasting and balanced growth."
That sure doesn’t sound like anything very momentous, but it was all that was needed to ignite stocks. The Financial Times summed it up well: "Apparently stocks rallied on the news, but we have no idea why, and we’re tired of guessing."
I suspect that the catalyst was a combination of overly aggressive bears, underinvested bulls and the power of the machines. The machines do a remarkable job of pushing trends higher as the folks on the sidelines, who have fond memories of when real people made market decisions, are left in the dust.
Being overly logical is not particularly helpful in this market. Everyone is trying to stay one step ahead, which means they are fading the machines, which are fading the contrarians, who are fading the market, and so on.