Authored by Attain Capital, via Valuewalk.com,
While many investors may be breathing a sigh of relief thanks to the bounce off the February low, with the S&P up 11% since the start of February – it’s still not all lollipops and rainbows out there in market-land. There’s some worrying undercurrents that could spell more trouble ahead, not to mention pros like Jeff Gundlach claiming there’s just 2% of upside in the S&P 500 and 20% downside.
As most financial media will remind you, today is the 7 year anniversary of the market's lows hit on March 9, 2009, a day when the Wall Street Journal wondered "How low can stocks go", which took less than a week after Obama said on March 3 that "what you're now seeing is profit-and-earning ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it" (sic) and just days before the Fed officially launched its expanded QE1 asset purchasing program.
After yesterday's last hour selloff sent the S&P to the very edge of the critical support trendline which, as shown yesterday, meant 1980 had to be defended at all costs...
... so far the support has held, and in overnight trading European stocks have managed to rebound on the back of more levitation in oil, while US equity futures have ignored a drop in the USDJPY which touched 112.20 in morning trading, and have jumped by 0.5% as of this moment, up 10 points to 1,990.
Those algos who scrambled to paint yesterday's closing tape with that last second VIX slam sending the S&P back over 2,000, forgot one thing - the same thing that China also ignored - central bankers can not print trade, something we have repeated since 2011.
Just when you thoughjt it was safe to chase the biggest short squeeze in history Fed vice-chair Fischer f##ked it all up...
The US equity market has only been more overbought 3 days in history...