Lead me
Follow me
Or get the hell out of my way!

General George S. Patton Jr.

Yesterday, there were two shocks to the system of the market. One was a knee jerk reaction and the other was an epiphany.

Out the gate, stocks stumbled hard on news that Greece’s contingency showed up in Brussels without a fresh proposal.  Later in the session, stocks rallied on the word of a potential short-term financing for Greece to be determined on Sunday.

Rumor has it that such a deal would cover financing for two to three years, but the details remain. Of course, at this stage in the game, everyone has to brace for nothing and perhaps face the scheduling of yet another summit.

However, I feel as though the tables turned yesterday and creditors captured that old spirit of Sparta, also impart by General George Patton Jr. imploring troops to lead, follow, or get the hell out of the way.  It is time for Greece to step up, step out, and get the hell out of the news cycle. They have to know this and now the market knows. It is a big relief.

In the meantime, yesterday was a great session for technical analysts and the buy-on-dips crowd who made a fortune over the last two years. However, here is the deal: the big boys who really pull the strings understand how to manipulate the crowd and to use headlines and emotions to create buying opportunities. The pace of yesterday’s reversal was so impressive that we had not seen anything like it in almost five years.

Nevertheless, it is clear that while fear and anxiety hogged the news, there were a lot of would-be buyers waiting to pounce. By the way, they were not ma and pa investors.

The S&P 500 came within the shadow of its 200-day moving average of 2054; that’s when buyers began to nibble.

The bottom line is this has become a legendary bull market and yesterday’s action just underscores its resolve and the chance for investors to make money.

If you are not a nimble trader, the last week has been a great time not to lose money. The most difficult task for me has been handholding and keeping investors calm. I love the challenge and I admit that it is difficult when people sell on fear and emotions rather than A) being cool and wedded to fundamentals, and B) not buying anything during down swoons.

Corporate Socialism

You are going to be paying a lot more for lattes at Starbucks and chicken wraps at Chipotle because socialism and capitalism cannot merge into the same model, even if you call it conscious capitalism.

Despite the fact that Arabica coffee beans have plummeted 45% in the past year, Starbucks needs to increase prices as much as $0.20 on some products to send workers to college and to be nice to the earth.

Then there is the higher minimum wage sweeping the nation, especially in California where San Francisco just hiked its minimum wage by 14%. Chipotle just hiked its prices by… guess? Try 14%.

We scold Greece and other failed nations for embracing socialism, but this movement of reshaping corporations with its shareholders coming last means that there will be higher prices for customers and fewer jobs.

Howard Schultz is at the top of the conscious capitalism pyramid and he blinked today. However, you’ll pay the price. I think we must debunk the notion this is anything but another way to make the corporate balance sheet part of the public domain.

Today’s Session

This rally will continue to be haunted by market volatility. Later today, the Federal Open Market Committee (FOMC) will be releasing its minutes for last week’s meeting. Observers will be anxious to hear the phrasing used when the committee talks about when the rate hike may finally occur. Also, the Federal Reserve will be releasing its consumer credit report. In the past, consumers have been keeping their spending at bay, however, retailers are hiring like crazy. For retailers to hire more, that means that they have been seeing higher foot traffic in their stores. Reports have been indicating that consumer sentiment is up, so perhaps they will finally prove it with their wallets.