World Markets Are Tenuously Higher
Richard Rhodes | Sep 05, 2013 03:51AM ET
:
The world economy is muddling through. The US payroll tax increase and “sequestration” are headwinds to the US economy; China is being pressured by Japan, and both the US and China housing market are weakening. The eurozone remains mired in inaction, athough showing signs of growth. Quite clearly, we feel risk is being mispriced at current levels given the economic backdrop and developing pressure upon corporate revenues/margins/earnings. At some point, the market will view the central banks will be non-sequitur.
STRATEGY:
The S&P 500 remains above the 160-wma long-term support level at 1363; and the standard 200-dma support level at 1562. But perhaps more importantly, the distance above the 160-wma “falied” at the +23- to +25% zone that is our “bubble-like rally” threshold. Hence, a correction of some proportion is forthcoming — perhaps -15% or more.
WORLD MARKETS ARE TENUOUSLY HIGHER as a combination of Syrian tensions, G-20 questions, and ECB policy decisions continue cause the market to be introspective. For now, there is a pall in the news flow with the Obama Administration still attempting to gain the necessary support for limited strikes in Syria. There are growing concerns that he very well may not have the votes in the House, and perhaps there is a bit of horse trading going on regarding a vote for action, and a preferred nominee for the Federal Reserve to take Dr. Bernanke’s place. Also, there are vocal concerns out of the G-20, and from China and Russia in particular, as to the Fed moving to reduce their simulative bond-buying campaign too soon. This could roil the financial markets and Main Street. One only need look to the weakening Indonesian and Indian stock markets and currencies as “ground zero” for those concerns. Lastly, the ECB decided to leave their interest rates and policy on hold for now. This was widely expected, and we shouldn’t anticipate too much from Mr. Draghi at his press conference.
To Read the Entire Report Please Click on the pdf File Below.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.