The market direction outlook for today was for some weakness in the morning but a higher close. I was not expecting a big move higher but probably around 25 to 30 points on the Dow and 2 to 3 points on the SPX. Overall investors are nervous and the VIX Index and price of gold both reflect that nervousness. The latest from analysts is they think the Fed is so “unconcerned” about inflation, that inflation may get ahead of the Fed’s interest rate policies which would mean when rates do rise, the Fed would have to boost them faster than originally expected. This would of course create a backdrop to what a number of analysts referred to as a “major correction”. This type of scenario worries investors with the markets sitting at all-time highs.
As well Jim Cramer has been warning that just as in both prior market crashes, M&A deals dominated in the weeks and months leading to the market tops in both of those collapses. Finally headlines like this one below from Marketwatch do little except spook investors.
These types of headlines help to spook investors and keep them nervous – Marketwatch Headline June 20 2014
S&P Market Direction – Intraday
The one minute intraday chart below shows the choppiness from today. There is a line running through the SPX today around the 1961.80 level which investors keep returning to. This could very well end up being the closing levels at the end of today.
Market Direction Outlook Into The Close
Into the close today stocks look set to close slightly positive. Once again the market direction up is very overbought and as explained nightly, there is little support level at the present heights. The latest rise in the market has investors and analysts nervous, but this is common when stocks move to new heights. Eventually we will have a pull-back and indeed any pull-back can turn into a correction, but there will be warning signs to assist. Until then I am continuing to add to positions, open new positions and trade some stocks such as I did this morning with BCE Stock.
Staying cautious never hurts but for today, the market continues to look positive into the close for all three indexes.
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