Equity Markets (except China) shrugged off the Greek situation and reversed course yesterday as investors and traders "rejoiced" at the continuation of the"lower for longer" interest rate scenario indicated by the FOMC's "dot plot" chart (see yesterdays blog).
The S&P 500 broke up through its recent short-term down-trend as buying re-entered the market with some heavier volume. Momentum could now potentially drive prices to re-test at highs at 2135.
Technically, the long-term up-trend remains intact:
Fundamentally, we are approaching the end of the 2nd Quarter and with that July will bring Q2 earnings reports.
Q2 Earnings Expectations:
Clearly, the fundamentals and the technicals are diverging (again) as market participant's take their direction from the Fed's (and other central banks) continued stimulative monetary policy.
While the Fed continues to see better ("improving") 2nd half 2015 economic conditions (as does the Bank of Canada), current conditions are at best, mixed:
Are central bankers and their "rosy" outlooks actually "cheerleading" the economy?
Scott Tomenson,CIM Managing Partner, Chief Investment Strategist