Have a close look at this daily chart of the SPX. Notice that we have been bouncing around the low-end of our trading range between 1250-1300 and just today did we vault above, however slightly. We can actually rally to the 1320 area and still maintain the downtrend that began in May.
These are simple technicals and this kind of analysis is a great help in your day-to-day positioning. But I have a new worry. Because the market has put on a spectacular end of quarter showing and all manner of financial assets have had a firm snapback, many market prognosticators will begin to say that the “economy” is getting better.
It is all a function of the day-to-day market action that dictates not just stock market sentiment but also overall business sentiment and perception. Most simply, companies value themselves on what their stock has done over the past several days. The same holds true for trading desks and investors of all kinds. And the Wall Street Complex dictates that prices spend more time rising that anything else–especially at the important end of the month or quarter.
So enjoy the party but until you can factually calculate TBTF bank’s shareholder equity, and know the true value of what is on their books, the “economy” as we know it will remain stuck. No political wrangling, no Central Bank stimulus, no investor confidence will bring back the “normal” economy until we wash out the bad debt.
Stop trying to shake me out
I say we go to the previous peak around 1340 then consolidate.
Everyone is still bearish and are fighting this rally. Its time to go for the kill
I think that market participants have “bent like a reed in the wind” for this end of quarter rally. Notice the volume? Sellers have just moved completely out of the way…
This is not about Greece. This is all about us and the end-of -QEII trade. Everyone told you that markets just had to crash, right? WRONG!
Next few days we have the final PMI’s around the world including China. We got the Flash data last week and they sucked big time, WHY do fund managers think they will be better??. UK is set to strike too tonight I believe. Bonds in rally mode…the fact the market hasn’t given up Scott’s 1307 and mine 1300 seems so silly. Totally agree about the crowded end of POMO trade.
See Scott’s comment above:
Everyone told you that markets just had to crash, right? WRONG!
Learn it, live it, love it.
We will see, Scott’s top is 1320…I see nothing in the Macro to say we should be buying.
You were saying?
Po…Give it time. Aussie buyers should be Aussie sellers next week. Some lame USA analyst came out saying the Weak China PMI numbers was a sign that China won’t raise interest rates..they imho don’t know China. China still has CPI problem big time due to hot money, plus even an article in their Press out today indicating that they could raise interest rates twice this qtr…boy I hope it is this weekend.
Seems like all of your computers and charts got you to miss the party that is still going on…you can still join of course but bring some more beer please.
Buy buy buy until the end of July
People like statistics. It makes them think they know what will happen.
Well we smashed through your trend line, what now?
Buy buy buy until the end of July
Shorts have been vanquished.