I often talk about the need to focus on markets and the price action while completely ignoring the noise from the crowd. Doing so will often help you sidestep dangerous advice that is designed more for ratings and eyeballs than anything else. Lately, the rhetoric surrounding the Greek crisis and default situation has risen to unprecedented levels. Each word uttered during press conferences and each statement issued in reports are over-analyzed.
It’s during times like these when we need to take a step back and remember: Even when the markets are sailing along nicely, there are always excuses or reasons for selling. At the end of the day, it is the market action, not the cause of that action, that will be our guide. Pay attention to the technical condition of the markets, along with sentiment and indicators. These will always point the way forward.
Back to Greece. Yes, the markets panicked on Monday, and even after cutting through the noise, this situation looks like a big wooden box for Greece. Something is going to happen over the next few days, but no matter what happens between Greece, the IMF, the ECB and the Eurozone, I only care about one thing: How the market is doing, period. Taking an objective view is the best way for me to make the proper trading decisions. When I insert my opinion or let emotions get the best of me, I get into a lot of trouble. 
This one fact remains: There is NOTHING we can do to sway the market in one direction or the other. We can buy protection in case of a disastrous outcome, but those bets are not counted on to pay off.
I suspect the Eurozone has been preparing for a fateful ending with Greece for some time, so it doesn’t seem to be an event they are too concerned about. However, the comments from those outside of Greece are going to scare everyone who is listening into making the wrong move. All I have heard lately is opinion about what will happen once this situation is resolved. Greece is done, Europe is in trouble, the entire world will pay the price. How nice, but I only care if the markets turn these opinions into fact.
So, let’s take a look at the market facts and interpret what it means for future.
First, the VIX. This indicator has reflected complacency for months, and while the depressed final number (closed at 14% on Friday, June 26) seems low, the angst continues to be felt. When the VIX falls to the 12% level it will mark an extreme low in the indicator and short-term top in the market. All the indicators on the VIX are in the middle, and therefore are neither bullish or bearish. (I talked about this on realmoney.com last Tuesday (see the chart).)
The McClellan Oscillator continues to flirt with the zero line, and while it’s been straddling that line, there is clearly no trend here. Puts/calls reflect hesitancy without any solid bets in either direction. Polls are split, too, with many tilted toward neutral – a “wait and see” approach. That is not bearish! Finally, looking at the Chaikin Analytics for bit, we see more names in the neutral camp than we have seen in quite some time, many more than are categorized as bullish or bearish.
Taken together, the markets and traders/investors are in agreement: Sit tight.
