By Greg Peel

The Dow closed up 68 points or 0.5% while the S&P managed only 0.2% and the Nasdaq fell 0.3%.

This choppy mix of index results reflects a choppy day's trade on Wall Street in which US data response battled it out with fear over Greece.

At the opening bell it was announced that new jobless claims fell 16,000 to 414,000 last week and that May housing starts rose a better than expected 3.5%. This provided stocks with a reason to bounce early, until the Philadelphia Fed manufacturing index for June was shown to have fallen to minus 7.7 from plus 3.9 when economists had expected plus 7.0. Back to square one.

The euro took another tumble initially last night to trough at US$1.4072 before bouncing back to be slightly higher on the day at US$1.4197. The US dollar index subsequently fell 0.2% to 75.43. Some faith was restored when the IMF declared that it continues to support Greece and that it was confident of a positive outcome on Sunday when euro-officials meet again. But for the IMF to release another tranche of what is still the original bail-out fund from last year, Greece must adopt new budget measures.

And that's a problem. The Greek prime minister was trying to put together a new cabinet last night in the face of further defections to the opposition but has postponed any announcement until tonight. Papandreou is now simply pleading for the budget bill to be passed through parliament so the IMF money can be secured.

And all of this is before we get to the new 2011 Greek bail-out fund, and there we still have a stalemate over restructuring or not restructuring.

The soothing words from the IMF had the Dow up over 90 points by midday, but there the bulls met the bears and we came all the way back down again. And as we came back down again, the VIX decided to move. After rising 18% on Wednesday night to 21 the VIX was flat last night all the way to 1pm before suddenly jumping 15% to 24. But it wasn't just put option protection traders were buying, it was call options as well.

What we have here is a "binary trade". With the VIX in the low twenties, option premiums are still relatively cheap considering the level of fear in the market at present. The worst case scenario is that Greece defaults and sets off the dominoes ? Ireland, Portugal, and maybe even Spain and Italy. Talk on Wall Street is again, as it was last year, of Greece being the new Lehman. But the best case scenario is that the EU and IMF resolve what they need to resolve and that Greece is saved once more. If that's the case, then we could see a very sharp rally. So the binary trade is simply a way of saying "I don't know which way this is going to go but I'm assuming the next move will be a substantial one in either direction".

By 3pm the Dow was back to square again but a late rally provided another attempt at a bounce. The VIX eased off to 22. The market is poised, and may have to wait until after the weekend to know what might happen next.

Commodity prices reflected this limbo state last night, with Brent oil bouncing back US$1.01 to US$114.02/bbl and West Texas adding US37c to US$95.18/bbl. Aluminium, lead and zinc were slightly lower while copper, nickel and tin were slightly higher. Silver lost 0.6% and gold lost US$2.00 to US$1529.20/oz.

US bonds were once again the safe haven last night as the ten-year yield fell another 4bps to 2.93%. The two-year bond yield fell to a record low of 0.3%. Bear in mind that headline CPI is currently 3.6% year-on-year. Over in Greece, the ten-year is trading at 18% and the two-year at 30%.