MLR - Premarket Pulse May 24, 2013
Major averages initially gapped down on Thursday due to negative news from China and possibilities of a quantitative easing slowdown in the coming months from central banks in the US and Japan, then clawed their way back to close near breakeven as the argument was made that any slowdown in QE won't be for a number of months. That said, Wednesday's high volume reversal was a big negative. The market is trading down in the premarket.
With QE is the main reason for the bull market that began in 2009, any concerns about a slowdown in QE could cause a market correction, so with increasing concern that QE will be slowed in the US and Japan in the coming months, it is best to keep your stops tight. That said, QE is still firing on all cylinders so the market could very well find a floor here and move higher as it has done in the past. Posturing by central bankers that QE will be slowed has not resulted in any central banks actually taking action to slow QE, so the current weakness in the markets could be short-lived as have others in the past when Bernanke or other Fed governors spoke of slowing QE. The world remains mired in recession and economic statistics out of the US showing any improvement remain suspect, so QE will continue as long as major world economies remain weak.
This information is provided by Virtue of Selfish Investing, LLC (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.