Radical Leftist Alexis Tsipras began efforts to form a Greek government on Tuesday by renouncing the terms of an international bailout and threatening to nationalize banks in a statement likely to reduce his chances of success. His uncompromising stance may lower already slim chances of forming a coalition by scaring off the former ruling parties New Democracy and socialist PASOK, while further unsettling jittery investors.

The market has reached levels where further deterioration may call for some defensive moves. As the table below shows, the CCM Market Models remain perched on the bullish/neutral line. The risk model reading of 50 means 50% of the signals side with the bulls and 50% side with the bears.

The chart below is an updated version of the one covered in a May 7 video. RSI closed above 50 on Monday; it remains perilously close to a bearish cross. Note the trend in the relative performance of stocks (SPY) to bonds (IEF) after a weekly RSI close below 50 - bonds did better than stocks, which is what the falling ratio tells us.

While the chart of the S&P 500 below looks complex, the concepts are easy to follow. The two red arrows near point A show where the downward-sloping pink trendline acted as resistance in the past. The blue arrow near point B shows the same line is trying to provide support near 1,357. Point C shows the green 50-day moving average with a flat slope. If the slope turns over, it indicates a possible shift in the intermediate-term trend. If 1,357 does not hold, points D and E highlight the next levels where buyers may step in.

Ciovacco Capital Management

Chris Ciovacco is the Chief Investment Officer for Ciovacco Capital Management, LLC. More on the web at www.ciovaccocapital.com

Ciovacco Capital Management, LLC is an independent money management firm based in Atlanta, Georgia. As a registered investment advisor, CCM helps individual investors, large & small; achieve improved investment results via independent research and globally diversified investment portfolios. Since we are a fee-based firm, our only objective is to help you protect and grow your assets. Our long-term, theme-oriented, buy-and-hold approach allows for portfolio rebalancing from time to time to adjust to new opportunities or changing market conditions. When looking at money managers in Atlanta, take a hard look at CCM.

All material presented herein is believed to be reliable but we cannot attest to its accuracy. Investment recommendations may change and readers are urged to check with their investment counselors and tax advisors before making any investment decisions. Opinions expressed in these reports may change without prior notice. This memorandum is based on information available to the public. No representation is made that it is accurate or complete. This memorandum is not an offer to buy or sell or a solicitation of an offer to buy or sell the securities mentioned. The investments discussed or recommended in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is not necessarily a guide to future performance. The price or value of the investments to which this report relates, either directly or indirectly, may fall or rise against the interest of investors. All prices and yields contained in this report are subject to change without notice. This information is based on hypothetical assumptions and is intended for illustrative purposes only. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION CONTAINED IN THIS ARTICLE. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.

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