A Greek default is looking more likely as the EU cannot agree on a package and the Greeks reject austerity. It is unlikely that any concrete resolution or default will occur in the coming days, giving the market some breathing room to rally in the near term.
The market now has a good oversold reading, the put/call ratio is oversold and sentiment is negative. The bulls in the Investor's Intelligence survey have fallen further to 37%, a reading which typically is positive for the market. The Investors Intelligence survey tends to reflect professional sentiment. The professionals have finally joined individuals in being negative on the market. The NAAIM, Hulbert and ISI surveys confirm this negativity.
With such widespread negativity and the market oversold I continue to give the bulls the benefit of the doubt. I will reassess my short term outlook at the end of this week as the oversold reading starts to wear off and we head into a typically seasonally negative week. The week after June expiration has a negative seasonal bias.