In yesterday's blog I broke down analysis of the S&P 500 on a quarterly and weekly basis saying the chart exhibited a few elements that would suggest an upward move on the way however I also warned that the current poor economic outlook was affecting sentiment and could possibly unhinge any promise coming from the rallies.
A number of uncertainties continue to haze the long term view with the impending British referendum "Brexit" sending volatile impulses through the global financial system together with the experimentation of negative interest rate policy in both Japan & Europe as well as dim economic activity out of US that's strong enough to showcase as one of the few countries in the world growing but weak enough to give way under the weight of an interest rate hike.
It seems as one economic calamity falls off the radar screen another appears hastily to fill up the void with panic instead of settledness. How long can this farce last? Long enough for many to believe there's still a chance to see an uptick in stock indexes around the globe. With every wake of additional stimulus added to an existing program the influence of monetary policy diminishes, exposing financial markets to the wrath of fear with no controlling body able to stop it.
Ironic that this would come from a firm that became so blinded by its own greed only to be burnt severely in the midst of the Financial Crisis and subsequently saved from the shame of bankruptcy by the Bank of America who found themselves forced rather than considered to act. One would've thought the painful lesson taught during this close encounter should have reinforced the idea that caution might be the best approach when evidence shows the counter to your beliefs.
Merrill: Long pause healthy for bull market https://t.co/OAcCpAul5W via @CNBCPro— CNBC (@CNBC) June 8, 2016
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