Pre-market futures are in the red with the S&P 500 pointing towards an opening loss of 6.50 points. Increasing concerns of events in Cypress and the EU over the banking crisis appear to be weighing more on global financial markets.
We're all told not to worry because Cypress is too small to even matter. And that's likely true, as long as you don't have deposits with any of their banks. What started out as a 10% tax on deposits has morphed into a potential 40% tax.
The S&P 500 has traded in a tight, sideways pattern for the last 8 trading sessions as it works off overbought conditions. The index remains in a very bullish upward parallel channel, and numerous leading stocks continue to act constructively.
So for all the news from Europe out there, this market continues to move higher. Ben Bernanke and the Fed continue to pump money into the financial system, and it has to find a home somewhere. We've been told by the Fed that their current QE program is a total of $85B per month, with $40B of that going to support mortgages.
Mortgage expert Barry Habib was on CNBC on Monday and pointed out that the plan is actually quite a bit larger because the Fed is permitted to re-invest payoffs and pre-payments they receive. So the actual Fed QE3 buying is closer to $120B per month.
Here's a link to that short video: http://stks.co/s6Tm
Of some concern in the near term is the recent piling up of distribution days, coupled with lower volume on recent up days. The key numbers of importance are straight forward: 1564.91 on the upside and 1538.57 on the the downside.
Here's a chart of the $SPX. Click on chart to enlarge.
We're all told not to worry because Cypress is too small to even matter. And that's likely true, as long as you don't have deposits with any of their banks. What started out as a 10% tax on deposits has morphed into a potential 40% tax.
The S&P 500 has traded in a tight, sideways pattern for the last 8 trading sessions as it works off overbought conditions. The index remains in a very bullish upward parallel channel, and numerous leading stocks continue to act constructively.
So for all the news from Europe out there, this market continues to move higher. Ben Bernanke and the Fed continue to pump money into the financial system, and it has to find a home somewhere. We've been told by the Fed that their current QE program is a total of $85B per month, with $40B of that going to support mortgages.
Mortgage expert Barry Habib was on CNBC on Monday and pointed out that the plan is actually quite a bit larger because the Fed is permitted to re-invest payoffs and pre-payments they receive. So the actual Fed QE3 buying is closer to $120B per month.
Here's a link to that short video: http://stks.co/s6Tm
Of some concern in the near term is the recent piling up of distribution days, coupled with lower volume on recent up days. The key numbers of importance are straight forward: 1564.91 on the upside and 1538.57 on the the downside.
Here's a chart of the $SPX. Click on chart to enlarge.
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