Last week, I was guilty of damning the market with rather faint praise. Since, the SPX has rolled
over and has once again fallen through difficult resistance at 2100. The strong momentum of the
winter rally died out in mid - Apr. and a second but weaker wave up carried the SPX up into
early Jun. near 2120 before the trend connecting it with the Feb. low broke. The market has dipped
into slightly oversold territory and near term support for the SPX stands at 2040. SPX Daily
No one thought the Fed would raise the FFR% at today's FOMC meeting, and with the economy
appearing to do better in this quarter and some modest improvement in business pricing power too,
fundamentals were not bearish, although the SPX remains indeed expensive.
More attention is being paid to the BREXIT issue. With no raft of economic positives to attend
an exit from the EU, and given some socio - political inertia, I would have thought the Brits
would opt to stay in, but the 'leave' crowd has apparently picked up some steam in surveys,
thereby tilting equities market players toward perceived safer havens.
As well, the oil price, which should be in a sharp seasonal downtrend in Jun. has started to waver
some, which in turn dampens the outlook for energy shares, a development bullish stock traders
now aver. For what it is worth, oil has actually held up pretty well so far.
Since my shorting days are over now that I progress further into my dotage, I have no interest
in taking a flyer on the stock market unless a much deeper oversold condition comes along. It
has been my view that this is the way to own equities in this environment.
- 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 !!!