For about the 20th time in the last couple months, the market jumped sharply on news that Greece was close to reaching a deal to save itself. I am not sure what has happened to all the other deals that were reached in the past, but apparently traders have now programmed a "Greece is saved" macro into their computers, which automatically buys on each new announcement that the crisis is solved.
The latest Greek rumors were just the icing on the top of rather peculiar day. We saw very bifurcated action with a small group of big-cap names, including AAPL, CMG, PCLN, ISRG, GMCR, AMZN, WYNN, etc. charging ahead while market breadth was more than 2-to-1 negative. Small-caps underperformed badly while money flowed into a select number of big-cap names.
Volume was down quite a bit and, with breadth so weak, it is not a very attractive picture but that outweighed the intraday reversal to the upside and the frenzy of buying in a few momentum favorites. It would be much healthier if the action was broader, but it simply isn't a very healthy market, so we shouldn't expect it to act like it is.
With the Fed announcement coming up on Wednesday afternoon, I don't expect the bears will have much appetite for pursuing shorts. In addition, action like we have seen today is going to encourage dip-buyers. If the market can turn back up so easily, they will be looking to go it again on another pullback.