I really do not like how this September/ October (more precisely mid September) is shaping up.
September is usually a positive market, so things could be kept together till mid September.
On a technical analysis (SP500) we have a support at 2,063 – 2,040 and 1,970. If 1,970 goes…the first real support is around 1,820(!!).
The things that could make this happen are quite too many to mention. The first that come into my mind are Fed rising (or not rising if the market is in a bad mood), the MDA 200 on the SP200 has been crossed (Death Cross), oil can wreak havoc on oil nation- emerging market – energy high yield US bond market), USD strength could spark another 1997 Asian Tiger crisis.
On the geopolitical side there is the great unknown China, a Greek Government failure, a re heating up of Ukraine tensions (by the way, not in the media, but they started again using heavy weapons) or something unseen (Saudi Arabia, North Korea).
In all it should be a nasty short healthy correction – so as an investor you should not worry too much as it set up the market for a great rally into end of year!
I do not think that the FED will commit the same mega error of 1937*
*In 1937 hiked to early the rates sending the US markets and world economy in a secondary recession after the 29. And this was one of economic causes that created the perfect conditions for the start of the Second World War.
investorpolitico 