We have seen that profit booking has began at the start of the April after S&P 500 touched multi year high . All of a sudden the optimism vaned and stock has reacting to the fundamental problems related to the Europe and more specifically spain and italy.
If we look at the first quarter, we have pretty much solid data from jobs, labor market and easy monetary policies from central banks and moreover the LTRO 1 & LTRO 2 ( European central bank funded ultra cheap money to european banks drawn in to the risky assets i the markets ) The effect seems to be vanished and again bond yield of the countries like spain and italy have started rising sharply from last week.
Investors wanted the correction since march but market has been resilient due to the optimism and liquidity.
Now the scene favors the bears as those debt problems from Europe were started making a headlines and provide an entry point to those investors who almost missed the first quarter rally. But according to the sentiment, investors should wait for deeper correction as Europe problem may aggravated and stocks may see some more correction lasting throughout april and may as it is known as " Sell in May" event.
S&P 500 has broken the 1370 key level, although it has reacted sharply on the next day and closed above it but according to the action on friday, market just hold the 1370 levels and this move will be viewed as a lower top, lower bottom formation. which will ultimately make the stock market to go lower levels. Next support for S&P 500 is 1330.
Trade the markets accordingly and don't just get invested fully in this corrective phase as you might get 10% deeper correction.
If we look at the first quarter, we have pretty much solid data from jobs, labor market and easy monetary policies from central banks and moreover the LTRO 1 & LTRO 2 ( European central bank funded ultra cheap money to european banks drawn in to the risky assets i the markets ) The effect seems to be vanished and again bond yield of the countries like spain and italy have started rising sharply from last week.
Investors wanted the correction since march but market has been resilient due to the optimism and liquidity.
Now the scene favors the bears as those debt problems from Europe were started making a headlines and provide an entry point to those investors who almost missed the first quarter rally. But according to the sentiment, investors should wait for deeper correction as Europe problem may aggravated and stocks may see some more correction lasting throughout april and may as it is known as " Sell in May" event.
S&P 500 has broken the 1370 key level, although it has reacted sharply on the next day and closed above it but according to the action on friday, market just hold the 1370 levels and this move will be viewed as a lower top, lower bottom formation. which will ultimately make the stock market to go lower levels. Next support for S&P 500 is 1330.
Trade the markets accordingly and don't just get invested fully in this corrective phase as you might get 10% deeper correction.
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