S&P500 Fundamental Outlook
Monday, June 23, 2014
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The reason for the mad rally is still the amount of money being printed by the Fed each month. QE injected 85 billion USD into the banking system after the subprime mortgage crisis when one of the biggest banks went bust, causing other banks to stop lending money to eachother, which in turn meant the liquidity was gone practically overnight.
While I am also very sceptical of the futher rise in SPX and cautious with any shorts I open, until the Fed winds down the monthly bond purchases there's no real reason for major pullbacks. The only thing that could drag it down is if we get a risk off day because of Middle East instability. I was actually expecting the drop last week, considering events in Iraq again adding to the headlines of Ukraine and Russia conflict. But it seems that the FED minutes completely overshadowed this and equity markets once again rose on Yellen's dovish speech. She is an extreme dove and this generally has a very positive effect on equity markets.
Beginning of this year, there was some worry about US recovery when NFP numbers came out much worse than expected, however this has now been proven as the after-effect of very bad weather. Equities are now all chipper after a string of good numbers, proving US economy is actually in much better shape and in pretty stable recovery mode, which is the reason why FED keeps tapering every month.
Right now, there's still no sign of US equities slowing down and with summer volumes kicking in, there's increased risk of volatility because all the moves are easily exaggerated in thin volumes. Investors have started to see SPX as a safe-haven, a risk-free environment.
I am Buying S&P500 again @1952 , Targets @1978 & 1992 with stops @1938 | Also here is my setup on $GBPUSD http://www.aymankhlifat.com/2014/06/market-outlook-and-gbpusd-recommendation.html
Aymanfxsignals Forex Performance results are updated Now From 1-1-2013 To 20-6-2014 ( 16 Months ) You can send an email to Aymanfxsignals@yahoo.com to check the Full Results (Live Statement - PDF).
Ayman Khlifat on Twitter : @Aymankkhlifat
Email : Aymanfxsignals@yahoo.com
The reason for the mad rally is still the amount of money being printed by the Fed each month. QE injected 85 billion USD into the banking system after the subprime mortgage crisis when one of the biggest banks went bust, causing other banks to stop lending money to eachother, which in turn meant the liquidity was gone practically overnight.
While I am also very sceptical of the futher rise in SPX and cautious with any shorts I open, until the Fed winds down the monthly bond purchases there's no real reason for major pullbacks. The only thing that could drag it down is if we get a risk off day because of Middle East instability. I was actually expecting the drop last week, considering events in Iraq again adding to the headlines of Ukraine and Russia conflict. But it seems that the FED minutes completely overshadowed this and equity markets once again rose on Yellen's dovish speech. She is an extreme dove and this generally has a very positive effect on equity markets.
Beginning of this year, there was some worry about US recovery when NFP numbers came out much worse than expected, however this has now been proven as the after-effect of very bad weather. Equities are now all chipper after a string of good numbers, proving US economy is actually in much better shape and in pretty stable recovery mode, which is the reason why FED keeps tapering every month.
Right now, there's still no sign of US equities slowing down and with summer volumes kicking in, there's increased risk of volatility because all the moves are easily exaggerated in thin volumes. Investors have started to see SPX as a safe-haven, a risk-free environment.
I am Buying S&P500 again @1952 , Targets @1978 & 1992 with stops @1938 | Also here is my setup on $GBPUSD http://www.aymankhlifat.com/2014/06/market-outlook-and-gbpusd-recommendation.html
Aymanfxsignals Forex Performance results are updated Now From 1-1-2013 To 20-6-2014 ( 16 Months ) You can send an email to Aymanfxsignals@yahoo.com to check the Full Results (Live Statement - PDF).
Ayman Khlifat on Twitter : @Aymankkhlifat
Email : Aymanfxsignals@yahoo.com
