Tough spot here. As mentioned down in the 3/18 post on the SPX weekly chart, the market is
overbought in the short run, and wouldn't you know it, there is now a surfeit of talky talk on the
Street that the Fed may raise rates again as soon as April. There is also another rehashing of
China's attempt to pump liquidity into its economy while trying to keep the Yuan relatively stable,
which many rightfully think cannot be accomplished together over the longer run. These concerns
have helped the dollar come up some from support, and have led to profit taking in oil, gold
and stocks. SPX Daily
There continues to be no credible traditional case for the Fed to raise short rates, and as for China,
most players probably realize already that if the country wants to continue with an easy money
policy It will probably have to let the currency weaken from time to time just as it will have to
take the foot off the monetary accelerator from time to time.
The market is in a tough spot because the SPX is just starting to turn positive on an intermediate
term basis as traders cope with the short term overbought. With fresh and important economic
data on the US over a week away, it will be interesting to see how hard traders bear down down
on the present short term overbought, especially now that we are down to the 'Sweet Sixteen'.
Now, there's a welcome distraction.
- Peter Richardson
- Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!