BarroMetrics Views: S&P 2014-08-18
Back from hols and ‘honeymoon’. I had a great time and it’s good to again climb aboard the saddle.
While on hols, the S&P had a pull back that had many calling for the correction that ‘has to happen’. Let’s see…….
Figure 1 shows the break and subsequently rally. The S&P is retesting the breakdown on a 5-day swing basis (weekly trend). The question that arises is whether we shall see a resumption of the downmove or see, at least, a test of the Primary Sell Zone of the range 1992 to 1904. I’d suggest the latter is more likely. The reason?
Figure 2 shows why.
You’ll see that the FED AMB graph has again moved up. With the sentiment strongly reflecting that the FED will come in to bail out the stock market, I believe it unlikely that we’ll see any meaningful decline until the AMB shows a decline of around US$200B.
FIGURE 1 S&P Daily
FIGURE FRED AMB