We’re basically at the same level on the S&P 500 (approx. 1680) as when Mr. Bernanke suggested tapering during his congressional testimony in May. It seems to me that the market is pricing in a very small amount of tapering. If the Fed were to reduce stimulus by $10 billion per month, it would still be printing $75 billion per month, which is still highly accommodative. So, if the market challenges its year-to-date high before Mr. Bernanke’s press conference next Wednesday, that pretty much tells you the market was never really concerned about Fed tapering. Also, since the market never challenged its June lows at 1560 I don’t think the market considered Syria a true concern. Anything can happen. There are still some economic reports due before the Fed meeting next week. In addition, there is the whole debt ceiling issue. If, following Mr. Bernanke’s press conference, the S&P closes above 1710 that would indicate a resumption of the longer-term uptrend. Short-term support lies at 1670. Long-term support is still at 1620.
Posted on: Wed, 11 Sep 2013 17:20:25 +0000
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