The two factors weighing on markets

Financial markets have been determined by the "risk on or off" argument for 4 years. Fundamental market analysis does not count in this environment. Last year the meltdown in stock prices was caused by a deterioration of the Euro crisis and was saved in autumn by massive liquidity injection of the ECB (twice € 500bn). This summer we have even two potential areas of infection:

1. The situation in Greece might trigger contagion. Equity markets already have discounted a deterioration in Greece.
2. Some people think that Israel might attack Iran soon. Reuters published an article today. The article states, that Bibi is determined and the window of opportunity is closing fast. Furthermore, experts have problems to read the Israeli signals properly.

Since March, we have been in a situation of great uncertainty. And markets hate uncertainty. However,
should it be clear that those scenarios are false, markets will rally. Should one of the two worst case scenario come true, markets will dive. In the meantime they are volatile and under pressure.