Apparently (although, I must say I am not certain why because it is so "old") the Greek question is still a factor:
On Wednesday, equity markets apparently "bounced" higher on "hope" of a potential agreement on Greece's debt payments.
Today...not so good (so far).
S&P 500 prices were unable to advance past the New Down-Trend line yesterday and weakness (selling pressure) today further confirms the short-term trend.
Buying support must hold at 2040-2070 and enough buying must emerge to penetrate the New Down-Trend line to return to a positive market.
A break below 2040 will add downside pressure as it would invite more sellers into the market.
Does Greece hold the key? Really?
or is it the FOMC meeting next week?
Longer-term, lets have a look at how much investors have been borrowing to invest in equities:
Data show that on the New York Stock Exchange (NYSE), margin debt is at its highest level ever. If asset prices start to fall and investors are forced to sell to pay down their margin debt...it could force further down-side momentum. This occurred in 2007.
The cost to borrow to invest will rise when the Federal Reserve raises interest rates. So a few investors may be thinking about that scenario.
And the Bond Market:
German 10 year yields hit a high 2 days ago close to 1.05, from a low of near zero less than a month ago.
US Economic Data:
Yesterdays Retail Sales data (+1.2%) showed a bounce in May:
Although it was slightly less than expected and does not do much to alter the longer term trend and our theme that the consumer, while more confident (perhaps) is not consuming like they did pre-2008 (and they are 2/3 of the US economy).
Is your portfolio protected from volatility?
Scott Tomenson,CIM Managing Partner, Chief Investment Strategist