I have long thought Greece to be an important issue. While Greece is small, the European banking system is thinly capitalized. On a mark to market basis the entire European banking system is likely insolvent. If Greece defaults losses would have to be taken and the dominoes would start to fall. Eventually, the powers that be would step in but there would likely be some pain before we reach that point.
I thought we could avoid the European debt issue for this week as not much was on the schedule in Europe for this week. Unfortunately the market chooses the point of recognition for an issue and that could be at any time.
Barring contagion from Greece the market should rally as we can now add panic to the mix of positives. Unfortunately, we cannot rule out contagion. I am not willing to take that risk, except with stocks that I believe to be cheap enough to hold through a recession. That is the reason I sold my trading longs, but held onto my core longs. Have a good night.