Good Friday morning all. The FED’s news came in with a bang and went out with a whimper…now it’s time for a correction from the near 1300 point move higher in the Dow since 8/24.
Important Point: I am not looking for a retest move to those 8/24 lows. However, I would not be surprised to see the market give up half of that amount.
In addition to continuing uncertainty about the FED, and their moves going forward, the market looks to be facing several new risks, directly ahead.
1) we are STILL in the risk-filled September/October time frame…fireworks are common, each year.
2) With Congress about to come back into session, the likelihood of something stupid coming out of DC is high, with talk of a government shutdown very real…again.
3) If you’ve been following the news out of Syria and the Middle East, then you know that the US has boots on the ground in Syria. And, Russia has taken over a Syrian airport and sources indicate that they have moved attack helicopters and forces, essentially staging a forward base. Should Russia attempt any move similar to their actions in Ukraine, this could very quickly devolve into military escalation.
Finally, consider the S&P 500 chart below. In addition to the one that I sent yesterday, this one breaks down an ascending wedge that has formed…these are bearish technical formations, and when combined with the 4 technical points from yesterdays chart, not to mention the fact that we remain well under the 200 day moving average, downside risk is upon us…
Here’s the chart…
Until next time, make it a great Friday…