NoCoPilot
Posts : 20300
Join date : 2013-01-16
Age : 70
Location : Seattle
 | | Subject: Stock Market Analysts Have No Clue, Do They? Wed Apr 13, 2016 8:08 pm | |
| - Churchill Management wrote:
- The fundamental picture behind the stock market continues to be murky. GDP estimates were lowered and there have been mixed releases from a variety of economic data. The uncertainty has been sufficient enough to prompt the Fed to express their new view towards “greater gradualism” or their signal to the markets that they will reduce the number of rate hikes and increase the amount of time to do so. Risks in global economic developments and financial markets have been cited as the primary reason for their caution. It appears the Fed is trying to avoid being a headwind for the markets.
The recent rally in stocks off the mid-February lows was swift but it is now running into areas of technical resistance and appears to again be consolidating. The November highs are directly above us, followed by the trading range that the market has failed to break through since 2014. Breadth is still in a divergence but is also challenging its highs from last year. Should the market gather enough strength to power through to the upside it would give us reason to see this as more than a countertrend rally.
For now, risks in the stock market remain in place. It is worth noting that since the market has reached the areas of resistance, we have seen the market pause. For the first time since the rally began we are seeing some consolidation as the markets have spent the last three weeks going sideways with no net progress. The market is currently at a critical point as it reaches key resistance levels. We expect consolidation to continue as the markets digest the gains from the last month and a half and also absorb some of the supply from the resistance level before it resolves to either the up or down side. |
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