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 SPY, commodities GSG, the euro 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.
Bullish:
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 FXE at current levels (year lows)
- long stocks SPY as they will bounce
- long oil 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 UUP on pullbacks below 22.50
- long gold GLD at 150
- short stocks SH
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