Just a few thoughts before the FED announcement.
Im basing my thesis of a dollar led thesis. Currently Im seeing a short term dollar strength over the next 2 weeks or so. This definitely leaves rooms for equities to further correct; along with oil as well.
Brief Technical/Macro Fundamental Preview on Equities:
Based of the dollar thesis it seems that post Fed announcement that over the next two weeks 980 support on the SPX will not hold. Evidence supporting this idea is MACD and RSI downward momentum; along with some what bearish volume confirmation.
If 980 support holds on the SPX this is significant bullish pattern confirmation. If this scenario pans outs over the next two weeks we may see side ways trading, especially if FOMC news is already priced in with the prior correction 8/28/09 to 9/01/09.
Overall as my friend Sauros points out that its too dangerous to enter at these levels since many of the past bears during the continued rally are basing this correction of weak fundamentals in the market.
Whats more interesting is the Chinese equity story. Perhaps for another day....
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