SP500 Off Highs, Doomsayers Out From Hiding

September 12, 2016

The S&P 500 took a hit off its highs during Friday’s trading session, smashing through the intra-day support level that we’ve been marking on our charts. Asian indices are today expected to follow suit.

S&P 500 4 Hourly:
Click on chart to see a larger view.

The catalyst for the sudden lurch down has been attributed to Boston Fed President Eric Rosengren’s soundbites. Comments that have been given airtime because of his historically dovish stance on rates now having changed tone.

“If we want to ensure that we remain at full employment, gradual tightening is likely to be appropriate.”

Rosengren’s main concern seems to be that even throughout the global rollercoaster we’ve been riding over the last twelve months or so, the US economy has withstood everything thrown at it and may even be at risk of overheating if interest rates stay this close to zero for too much longer.

“There are also longer-term risks from significantly overshooting the U.S. economy’s growth.”

Jeez, really?

There was however no mention of whether September or December were actually in play, and just seems like towing the Janet Yellen line that we saw out at Jackson Hole. I’m not as keen on buying into the September is in play rhetoric just yet.

For me, the narrative hasn’t really changed and indices traders really have no need to get too carried away in a short term momentum move off highs in the mother of all bull markets.

S&P 500 ‘Mother of all Bull Markets’ Weekly:
Click on chart to see a larger view.

But you watch all the doomsayers that have been preaching shorting the index from thousands of pips lower come crawling out of the woodwork with reasons why the top is now in.

I’m not saying they’re necessarily wrong this time, just that even a broken clock is correct twice a day!


On the Calendar Monday:

Monday economic calendar

Very light on the tier 1 economic data to begin the week.

While it’s not a Federal holiday in the United States, Sunday evening trading in the early Asian Session will start off a little slow due to it being September 11.

Use the session as an opportunity to keep the technicals on your MT4 charts clean and work out your positioning for the week ahead.

Win a Samsung by trading forex

Dane Williams – @VantageFX

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