September Trading Introduces New Risks For Bulls
Mercenary Trader | Sep 04, 2012 07:57AM ET
With the summer officially over, traders are returning to a challenging environment.
Equity indices are within striking distance of 52-week highs, having spent the summer grinding higher on incredibly light volume. At the same time, the global economy is teetering on the brink of recession, with a number of serious macro risks lurking.
The political spectrum creates just as much uncertainty as the economic picture (can one really separate the two?) as politicians around the globe struggle to come up with credible solutions to the various situations.
In Europe, Germany is now entering a recessionary environment, and yet the country is expected to be instrumental in bailing out their debt-ridden neighbors. Chinese politicians have limited resources to fight an increasingly likely hard landing. And in the US, the Fed is trying to determine whether another round of quantitative easing would be worthwhile.
Sentiment has been steadily moving higher with AAII (American Association of Individual Investors) readings now decidedly bullish. The Barron’s cover story this week “disclaimer .
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