Market Overview

Greek Poll: What Next?


The latest Greek polls have come out, and it is hard to make anything of it. The two that I am seeing are both signaling further deadlock and a lack of a majority. The first poll, conducted by Public Issue, has the radical left party Syriza with 30%, the New Republic (conservative party) at 26%, and PASOK (socialist) at 15%. Another poll from Data RC has the New Democracy at 23.5%, Syriza at 23%, and the PASOK at 10.6%. So what does this mean? Well, just more uncertainty and obscurity until the final elections in June.


It would have been nice to see a majority starting to form in one direction or the other. It seems that, if the PASOK and New Democracy parties can win enough votes, they will form a Parliamentary majority just to fight off the radical Syriza, which would be bullish for risk markets, including stocks (NYSE: SPY), commodities (NYSE: GSG), the euro (NYSE: FXE), and just overall market sentiment. If the Syriza were to once again win a lot of votes, Germany may become fed up with Greece and pull the proverbial plug.


Traders who believe that the New Democracy and PASOK will form a majority and keep Greece in the Euro might want to consider the following trades:
  • long the euro (NYSE: FXE) at current levels (year lows)
  • long stocks (NYSE: SPY) as they will bounce
  • long oil (NYSE: USO) as risk tradeT
Traders who believe that Syriza will win and increase the rhetoric that Greece will leave the euro may consider alternative positions:
  • long dollar (NYSE: UUP) on pullbacks below 22.50
  • long gold (NYSE: GLD) at 150
  • short stocks (NYSE: SH)
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