Grexit = Greek Exit from Euro-zone

Charts: Today the S&P 500 moved in and out of the key support level of 1340 about seven times. At the end of the day it punched through support and finished under this key level. What we saw then was hammering action as the bears repeatedly tested support and finally shattered it. This is not good.

Fundamentals: Greece is unable to form a government after its recent election so there will be another one in June. Polling data shows hard left parties are picking up support. The hard left in Greece is telling voters that Germany is bluffing when it says bail out money will be withdrawn if austerity measures and free market reforms are reversed. In this fantasy land Greece can go back to its old ways of living high on Germany's dime. Spain, Italy, Portugal, and the rest must step up to the plate and recommit to austerity and free market reform. If this happens convincingly, then Greece can get booted out of the Euro-zone without tearing the global economy apart. If it doesn't shake down this way, then all hell will break loose because the entire Euro-zone will be at risk.

Long War: Since the days right after 9/11 until only a few months ago America's strategy in the Long War was to try to win in a year or two, pack up its bags and go home. This is why in the early 2000s recruits for the Iraqi Army were not vetted for Al-Qaeda membership and given only a couple weeks worth of training. Back then America was just trying to shove warm bodies as rapidly as possible onto the battlefield in a blind, panicky attempt to cobble together something that sort of looked like victory and then declare peace. This policy was foolish beyond belief. One of the results is that today the Syria rebel movement is being taken over by Al-Qaeda in Iraq. There seems to be no push right now to stop AQII from having its way with the Syrian rebels because Yemen is the priority. Under the circumstances this is the right thing to do.

The CIA is not trying to win the Long War right now. At last we have the right policy. The groundwork is being laid for eventual victory many decades in the future. The global battlefield is being shaped in the Islamic world and in the halls of power in Washington DC. America is neither winning nor losing the Long War right now.