BRIEF COMMENT ON THE BROAD STOCK MARKET (4:00 pm EDST)
This week several Fed officials have been have been discussing the possibility of tapering bond purchasing or QE (oops...can I say that?) by the end of this year. This has been putting downward pressure on the broad stock market - especially the DOW. If the Fed is not careful, it's rhetoric could trigger a serious selloff. After all, this nervous and overbought market is ripe for one. I've been leaning towards the idea of equity markets pushing a bit higher into September or perhaps even later into the year for a final top (perhaps even a "blow-off" top) before a very serious correction. This is still possible, unless hawkish rhetoric from the Fed kick-starts a serious correction sooner than later. We will have to wait and see. The DOW is getting pretty close to our "line in the sand" at 34,691. As I stated earlier this week, a break and close below there could signal a major downturn in the DOW, and if that happens, the S&P 500 and NASDAQ could follow.
This week several Fed officials have been have been discussing the possibility of tapering bond purchasing or QE (oops...can I say that?) by the end of this year. This has been putting downward pressure on the broad stock market - especially the DOW. If the Fed is not careful, it's rhetoric could trigger a serious selloff. After all, this nervous and overbought market is ripe for one. I've been leaning towards the idea of equity markets pushing a bit higher into September or perhaps even later into the year for a final top (perhaps even a "blow-off" top) before a very serious correction. This is still possible, unless hawkish rhetoric from the Fed kick-starts a serious correction sooner than later. We will have to wait and see. The DOW is getting pretty close to our "line in the sand" at 34,691. As I stated earlier this week, a break and close below there could signal a major downturn in the DOW, and if that happens, the S&P 500 and NASDAQ could follow.
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