Greece may not face scary default: Schaeffer's Investment

After a good start to the year for US markets, Ryan Detrick, CTS, Schaeffer's Investment believes that it is time for equities to consolidate. Detrick is of the view that traders may use the Greece issue as an excuse to book profits. He added that the US is finally decoupling from all the European issues to a degree is an encouraging sign.

According to him, Greece may not default after all; even if it does, then it would not be a scary default. Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying video. Q: With the Greece meeting underway, it seems the markets have turned nervous or is there more out there, for instance, earnings which is influencing the markets? A: You are right, when we look at today, we did have some good earnings on the earnings front. The Greece issue is definitely taken a hold at least today and everyone is just taking a step back. Obviously, the US had a really good start to the year - one of the best starts to the year in 25 years. When I look at the S&P 500 from a technical point of view, we are right back around the July peak of last year of 1350. So given the big rally we have had, I don't know if Greece is the reason for selling off; it might be the excuse for selling off.  But we had a good rally may be it is time to have a little bit of consolidation, wait for this Greece deal to finally work its way. We have been talking about it for two weeks now; finally we need to get this deal out of the way so that we can move on. Q: Are you reading the markets as collectively expecting Greece not to default? A: That would be our take. The one other way we are looking at it, specifically from the US point of view, as all of a sudden this year correlations have finally begun to drop and the US has done much better. It is nice that US is not so handicapped by what happened in Europe everyday and we do think that the Greece deal will happen.  There will not be a scary default that's the worst case scenario. But at the same time, the fact that the US is finally decoupling from all the European issues to a degree is an encouraging sign, we think specifically from US point of view.