The French philosopher and existentialist Jean-Paul Sartre once wrote, "Nothing has changed and yet everything is different." While his work focused on human consciousness, his words could not be more relevant to the belated European elections hangover that looks to be finally setting in today. That brief blip of a bounce that confounded investors Monday has suddenly and inexplicably been replaced by a world of hurt today. With the prospect of another Greek default and election combined with a short-lived eulogy wishfully marking the end of austerity in France (and beyond), and one day later, how the tide has turned.
To borrow from The Beatles, "Yesterday, all my troubles seemed so far away."
It's not just Europe that is feeling the ballot box hangover, almost every asset class is feeling the pinch and looking vulnerable.
"We have air pocket risk," my co-host Jeff Macke explains in the attached video, referring to the space beneath the technical support levels that all of the major asset classes are testing.
Whether it's the Euro's seven-day slide to $1.30, the 10-year Treasury yield swooning back to 1.80%, the S&P 500 slamming back to 1350, or crude oil spiraling towards $95, it may not be Greek panic, but it's threatening to become a slow-moving meltdown.
Of course, all of this has a familiar smell, and it forces us to question if our joyous start to the year was indeed the best of 2012 until our election is settled. The truth is, no one knows. But when you look at where we are now, and where we were just seven months ago, the temptation to sell is palpable.
Macke outlines the choice traders face, saying you can either, "declare victory and go away or play bravery and hope that 1350 on the S&P holds."
As much as this European summer sell-off catalyst has a recurring feel to it, there is at least one key difference this year versus 2010 and 2011: profits. The fact that stocks are up sharply this time as we appear to be headed into another seasonal sell-off should make it that much easier to pull the trigger and reach for the sunblock.