S&P500 Update: New short term uptrend established and Wednesday's Greek Austerity Vote

June 28th saw a pop from the markets at the beginning of trading.  This jump was sustained into close.  Interesting enough, using Andrew's Pitchfork, from the lowest low to the high point and the low of the correction, we can see a potential uptrend being established.  This lower channel is where support was found in the morning setting off a rally which ended in the middle of the lower channel.  Watch for retests of this channel for clues to see if a change of trend is actually occurring.

The major caveat is systematic risk.  There is a lot of problems showing up again and the governments around the world are attempting to find answers for them.  Most notable is the Greek austerity vote tomorrow.  This vote will be a sign of things to come, as a rejection of this vote means a renegotiation with IMF and EU on aid packages.  This would bring the markets under pressure as sovereign default becomes a plausible outcome.  In addition, Greece would likely have to vote for a new government one which aligns with the interest of the citizens. 

A summery of the Greek Austerity measures that are on the table can be found at the BBC in this article

The measures are broad based touching taxation, public sector cuts, spending cuts, cutting benefits, and privatization.
A few examples:
"A solidarity levy of between 1% and 5% of income will be levied on households to raise 1.38bn euros."
"The tax-free threshold for income tax will be lowered from 12,000 to 8,000 euros."
"The VAT rate for restaurants and bars will rise to 23% from 13%."
"Nominal public sector wages will be cut by 15%."
"Wages of employees of state-owned enterprises will be cut by 30% and there will be a cap on wages and bonuses."
"Education spending will be cut by closing or merging 1,976 schools."
"The statutory retirement age will be raised to 65, 40 years of work will be needed for a full pension and benefits will be linked more closely to lifetime contributions."

I always wonder about the reaction to such measures if they were instituted in Canada or the US.  More interesting would be the government reaction to protests to these measures.