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| The S&P (Photo credit: compscigrad) |
Why is it important this break?
First, because it occurs in the most representative market index. There is no doubt that the SP-500 is the index that best represents the market. Consequently, the destination of the market is the destination of this index.
Second, the break of yesterday violates a "very important" support level, which opens the door to a major fall on Wall Street.
In technical terms, the following support the SP-500 is located around 1.308 points, ie a little over 2% below yesterday's close. However, the strongest support is in the 1.275 points, representing a decline of 4.7% in relation to yesterday's close.
That can happen in the next few days? The market is clearly oversold in the short term so it is very likely to be a "technical bounce". My opinion is that this would be an important opportunity to sell my positions and not to take new positions. But of course, that's just my opinion.
With a very complicated international scenario, there will have to see if there is any possibility of manipulating the market. Greece and Spain have been a very difficult position to Europe. Yesterday, Italy received some bad news. Around 26 banks were downgraded in their risk rating. Finally, it appears that the new government of France did not support the austerity measures pushed by Germany.
With all the pressures, the Fed and the ECB will be able to prevent the fall of the markets? It is very difficult to answer that question without trying to be a magician. Bernanke Plan is based on the increased value of financial assets. If the stock market goes down, the plan collapsed with it. Also, this could have an effect on the November elections.
I have the impression that Bernanke and his European friends are trying to lower commodity prices, principally the Oil. Thus, it would generate more spending power in the population. However, I think it's difficult to do this without "brought down" to other markets.
Source: InvestorPlace
Nice blog good information about market I really appreciate your post and you explain each and every point very well. Thanks for sharing this information.
ReplyDeleteThanks
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