THIS WAY OR THAT? Which way will the cookie crumble? Right now, everyone is waiting to find out how it will all play out with Greece. Clearly, whichever way this plays out will have an impact on the currency market and broader financial markets. My feeling with all of this is that if Greece does come to a formal resolution with its creditors and a deal is reached, we will see an initial surge in the Euro and currencies across the broad against the Buck, before the market finally stalls out and reverses sharply back in the Dollar's favor. I think we will get that initial euphoria of the solution in place and everyone will breath out a sigh of relief that Greece isn't going to exit. But once the euphoria fades, there will be a reality of a long hard road ahead for Greece and the weight this has on the rest of the Eurozone economy as Greece sets out on a painful recovery path. If on the other hand a deal can't be reached and a Grexit becomes a reality, I suspect we will see a hard sell-off in the Euro and other currencies (in sympathy) against the Dollar before the market eventually bounces the other way.
LEANING FOR A DEAL - While a Grexit would inject fear into the market, perhaps the elimination of what has become a poisonous situation will ultimately prove to be a good thing for both Greece and the Eurozone economy. Of course, I could argue a Grexit would be bad all around, but I think the positives would ultimately shine through down the road. In the end, I think we will see a resolution and Greece will stay within the Eurozone. The Euro will rally for a bit and the market will then start to focus back on the Fed liftoff theme and monetary policy divergence with the rest of the central banking world - a theme that favors the Buck. I haven't established any new positions yet, and managed to book a small profit on my latest SPX500 short. I think there will be plenty of solid trading opportunities this week as the Greece risk volatility plays out, but for now, I'm just sitting back and waiting. We're coming up to the final month of the first year of the JKonFX un-leveraged portfolio and things are looking good with the portfolio up just under 24%. The trading has gone well this year and I am looking forward to closing out the year strong and getting into the next twelve months.