For the first time since the last week of December of 2011, the S&P 500 Index closed lower on the weekly chart. Recently I have been discussing the overbought nature of stocks based on a variety of indicators. However, the real question that should be asked is whether last week was just a short term event or if we see sustained selling in coming weeks.
With all eyes on the unemployment report and Europe, the CME Group’s PR Department nearly created an all out panic with their announcement after the market close on Friday relating to futures maintenance margin. The original statement was vague and I was quite concerned until I checked out the CME Group’s web page and the PR Department sent an update clarifying their position.
The Unfortunate Truth About an Overbought Stock Market
Writing about financial markets is probably the most challenging endeavor I have ever immersed myself into. I am a trader first and a writer second, but I have really come to enjoy scribing missives about financial markets because it really forces me to concentrate on my analysis.
The Euro is trading higher this morning as the Eurozone is rumored to have a new bailout fund to save Greece from default. The EUR/USD has so far hit the 1.3690 high, but many traders remain uncertain till the 1.4000 level is once again broken. Intraday bias remains on the downside, as long as the 1.3934 minor resistance line is not broken.
S&P 500 Update for Beginning of Week Sept 12th-14th
How will the never-ending eurozone crisis finally end? All roads lead to the printing press...
Recently. I have said, "watch the bond market." The action in U.S. Treasury bonds makes for a good risk barometer. If bond prices rise and yields fall, that means "risk off" is back on the menu.
The financial stocks are soaring today on yet another bailout. Europe just bailed out Greece and by doing so, saved the world from yet another global financial crisis. Many will not understand how this was a bank bailout, yet again. Let me explain. If Greece did not get their bailout, they would default.