Lots of sellers not yet finding buyers:
S&P 500 is looking for buying support, but may not find it until near 1775 where the long-term up-trend line from 2009 crosses and then it remains to be seen if that will be enough. If it is not then the 2007 high's near 1575 will be the next major point of support.
At the moment the bad news and the worries continue to build and that is causing anxiety amongst financial market participants.
Fed Chair Janet Yellen will address The US House of Representatives and The Senate this week (Wednesday and Thursday). Perhaps this will help us all to understand what the US Federal Reserve has in store.
Obviously financial markets fear rising interest rates in a deflationary environment that is being driven by lower commodity prices. However, growing employment and declining unemployment in the US and in many developed nations is providing somewhat of a dilemma for policy makers and adding to the uncertainty.
Build in a large global debt burden, much of it tied to commodity producers and further uncertainty surrounding economic growth in China and as we have been advising for months (and months and months), the holdouts are now, finally moving to less risky assets and cash, driving the selling.
Further, value in equity markets is being reduced as analysts continue to lower earnings forecasts, making them less appealing and buyers (with cash to invest) are comfortable waiting.
We shall talk in detail about all of this and more on our weekly webinar tomorrow.
We shall post the recorded version at about 5pm EDT on our website:
Feel free to tune in.
Scott Tomenson,CIM Managing Partner, Chief Investment Strategist