On the other hand…
Early this morning I supported the notion of a sideways market for the remainder of the summer. Today we’re seeing a strong rally develop as the Fed announce the intention is to sit on their hands. 3 things have the capacity to move this market – macro economics, the fed & oil. Oil prices are in the process of returning from Mars and are now merely situated somewhere on the Moon. The Fed refuses to hand out any painful medicine. The only thing potentially stopping an avalanche of sideline money from being launched into this market is further macro shocks:
Analysts reduced their earnings estimates almost every week this year. In January, the average projection was for profit growth of 3.2 percent at S&P 500 companies. As of last week the average estimate was for a decline of almost 19 percent.
Elizabeth Stanton, Bloomberg
It’s going to take something unexpected (& pretty ugly) to test new lows.
For now, the path of least resistance is up.