Selling Should Be Contained Until the Grand Bargain Details Are Released. Get Ready For Disappointme


The 10% rally from a week ago is stalling out. This week we’ve had volatile moves each day as the market bumps up against overhead resistance at SPY 123. In the last three weeks, the market has gone from oversold to overbought. On the positive side of the ledger, stock valuations are attractive. The S&P 500 is trading at a forward P/E of 13 and interest rates are at historic lows. In September, Asset Managers rotated out of bonds and into equities before the end of the quarter (window dressing). This reallocation should continue, but the bid is rather passive. Earnings …

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