SPY and S&P 500

[viktor_k67]

It is more than 2 months as the DJI, S&P 500, DJI and Nasdaq 100 indexes are is the 5% (see the chart #1 below) side-way range. On the other hand, NYSE Composite and Russell 2000 are is in the side-way trend since April of 2014.

Current side-way trend ()see chart #1 below) looks like a bigger-version of the trading at the top levels before diving down. Increase in volatility we have been witnessing over the past 2 months is a bearish sign. What I want to say is that I see good odds of having a strong correction down. I am not talking about a crash. We have high volatility but not pre-crash volatility. See small research on this subject at
Volatility - S&P 500 - stock market crashes

Still, the market may go up. On the S&P 500 chart #2 below you will see that in 2004 the S&P 500 has been trading in 6% side-way range for more that 10 months and then the S&P 500 went up until it crashed in 2007. The difference between now and 2004 is volatility. The 14-day Absolute ATR was around 1% (100 points a day in average) in 2004, now it is around 1.5% (300 points a day in average). In 2004 the S&P 500 dropped down and then bounced up for 5% 4 times in 10-month frame - now we had 4 drops and recoveris within 2 months...

Chart #1:

Chart #2:

Charts courtesy of marketvolume.com

 

[eurusdzn]

You know how markets change and have a different reaction to well known inputs.
The sentiment has been that a fed rate hike is not certain and that a rate hike is bad for stocks.
It will be interesting to watch for any change in those perceptions.
Price action after NFP was stong in gold, US rates and the USD. Not so clear in stocks.
Greece is front center for now it seems. Wouldnt surprise me if a Greece "can kick" solution propels stocks higher. This is not a contrary opinion. Just talking as usual.

 

[viktor_k67]

We still did not see a reaction on drop in oil prices. lay offs are still coming and shutting of some production is still coming. Last consumer spending report show that low gas did not bust the consumer spending as media was trying to assure us - we saw opposite.

We also still did not see market reaction on stronger dollar. last Trade Balance report is not good.

I guess you are right - everybody waiting what FED says about rates. If rates goes up many financial institutions (fund managers) could be pressed to pull money out of the market to pay higher interest... and everybody there know it.

When I see MDSO (media Solutions Inc) with PE ratio 409 and market cap $2.42B and only 6M of net income and (there are a lot of such stocks), I have feeling that many financial institutions used cheap money from FED just to buy and pump.