Any traders predicting a multi month equity rally apart from me ?
As of today I am.
Last week was the turning point.
Significant equity upside expected this year according to my analysis.
However the SPX big picture remains very bearish and unfortunately this will not change.
I don´t think so. I believe we are going to stay in a range (S&P) between 1400 on the upside and 1250 on the downside, basically where we have been the whole year.
Below 1250 will be Central Bank intervention. To get over 1400 we need strong fundamentals, which are not there at the moment, namely:
1.- China: Economy is slowing down. You can debate whether is a hard landing or a soft landing, but the fact is that it is slower.
2.- Europe: It`s economy is in recession and some countries already in depression.
Nothing was solved last week, it was only a paper written with a lot of good intentions but no concrete plans. Don't expect anything to come out of it, in few days time we will be speaking again about Spanish yields @ 7% and the break up of the EURO.
3.- Emerging markets: Slowing down because of points Nr. 1&2.
4.- US: In a horrible shape, only masked because Europe is even worse and the elections are coming. Once the elections are gone we will have to reconsider the analysis.
And please don't forget the Iran/Israel conflict.
We are going down, that's for sure. The question is how long it is going to take. Will it be a severe crash or just a soft landing? I believe the Central Banks/politicians are going to panic and print money beyond any reasonable limits. Whether that formula will keep working or whether we are going to be hit by a black swan in the middle of the road, nobody knows.
But the overall picture is negative in my point of view.
My two cents.....
whistling:whistling
