Another big weekend for Greece and another big opening for the market on Monday. Which way will we go this time?
What do we know about referendums and votes?
We know that in the majority of cases the early opinion polls lie. The most recent notable cases were the Scottish vote and then the UK general election. At times you couldn't get a fag paper between the results of countless polls yet both showed resounding final results
People and opinion polls are like traders and demo accounts. There's no fear because they are not real. There's not one single thread of fear in trading millions on a demo account but there is when you have to do it for real. The same goes for opinion polls. If people want to take a controversial stance, talk tough, make a protest then doing it where it doesn't matter is the easy option
Despite the polls showing the Greek referendum to be very tight I'm going to err on the side of history and put myself in the yes camp. Irrespective of the fact that this is a vote on the current deal put to Greece by the Troika many will see it as the start of whether Greece stays or leaves the euro
What's the risk to this vote?
My only thought that the Greeks could vote no is that they proved they are willing to make a bold statement, which they did when they put Tsipras in power and if he's still got their ear then they may be willing to follow. I'm just an outsider looking in though, like many of you, so we only have what little sentiment we get from the various Greek sources like Dimitris Papas (@papakias123), who just tweeted us that things are calm in Athens right now, and there's less riots than usual :-D (Good to see that the sense of humour isn't suffering), and @Yannikouts who is someone who is right in the mix of it, and he says that in his opinion, only around 15-20% of no voters and 5-10% of yes voters see this as just a vote on the deal. That shows what is really on the line
How will the euro react?
The euro is no Greek expert either and it will move one way or another. A yes vote should see the euro gap up and a no vote gap down. But how far can it move? A yes vote will bring a kneejerk move but won't remove the risk of continued negotiations and arguing, and it won't suddenly mean everyone they owe gets paid. Those will be separate hurdles we'll have to negotiate after.
A no vote will be probably bring the bigger move as that will push Greece closer to an exit, in the markets eyes.
I think the price action we saw Monday is probably a fair reflection of the type of initial move we'll see but be wary of any gaps as we saw how quickly they can reverse
If you are going to trade it then be ready for a sizeable move and be prepare your trades accordingly. I'm half tempted to take a small long into the weekend to back a yes vote but that's a trade that's nothing more than a punt, so is not proper trading. I may even just hit up the bookies and place a fixed odds bet so at least I know my potential loss
Monday will be fun and games whatever happens so we should at least be thankful for the volatility. For our Greek friends, stay safe and for traders, trade safe, or stay out if you're unsure, and lets see what gifts the market brings next week
Greeks to decide
