Combine one part meaningless press conference, one part unfounded rumor and two parts goal-seeking algos and you end up with a 19-pt ramp job overnight.

The Greek situation remains volatile, though it seems pretty clear that deadlines will continue to be extended until TPTB can announce something they consider a “success.”

Friday’s drop easily tagged our initial downside target and within 4 points of our secondary one.  At the current pace, this morning’s ramp is likely to undo all that downside.

continued for members…

Until the Greek situation is resolved one way or another, traders will continue to be subjected to wild swings in either direction.  Maybe a great time for that vacation you’ve been putting off.

Recall that Thursday’s highs came up just short of a .886 tag, so it’s entirely possible that SPX will make it back to 2127.59.  We’ll set that as our upside target for now. For wave watchers, it would constitute a truncated 5th wave in a very mild 3rd from the 2072 lows.

If, on the other hand, SPX is unable to top Thursday’s highs, then our initial downside target of 2050 remains intact.

We have housing data coming out at 10:00 AM EDT — usually a positive for the “markets.”

One note I’ve been meaning to mention: last week’s rally (and, this one) is very evocative of the June 2011 one that departed from a very well-defined falling channel.  From the May 31, 2011 post Stay Groovy:

I don’t mean to suggest we’ll see the same dramatic sell-off that occurred in July-August (though it’s an interesting scenario to consider.)  Central banks and their lackeys have been much more blatant in their price supporting, and their intervention tools have been much improved in the past four years.  Still, one has to wonder…

It’s been quite a while since the October lows – which were barely retraced at all.  We’ll see what happens if/when the SMA200 — now at 2050 — is tested.

UPDATE:  10:45 AM

SPX just reached the 2127.59 target on the basis of a BBC interview which, when released, will feature Greece’s economic minister verifying that Greece is rescued.  All this, according to Zerohedge, which is piped into the rumor mill as well as anyone.

BBC economic editor Robert Peston was told by the Greek economic minister George Stathakis that “he believes Greece’s new proposals to balance the government’s books have broken the deadlock with its creditors.”

He said he expects eurozone government heads to issue a communique later today that will say there is now a basis for a formal agreement with Athens to complete the current bailout programme and release €7.2bn of vital funds.

Whether or not the rumor is true or the interview even occurred or the finance minister was telling the truth…who knows?  All I know is that the .886 was tagged and our bias is to the downside from here at 2128.  First downside target is 2105.34.   Updated charts in a few…

Obviously, tight stops should be utilized since a true solution (or even a very believable lie) could easily send SPX to 2138.