SPX update

The SPX consolidated as expected around the 1330 far better than anticipated as I rather would have expected a bit more of a pullback which only happened to the Tech sector. A retest of the 1344 level is now mandatory the next 48h as we have a very benign short term window starting today. After that test I look for a brief retreat rather and we could trade back to the 1320-30 level before the push towards 1370-80 over the next 3-4 weeks. We will be in a volatile trading range once the earnings season kicks in a week from here and the broad range can be defined as 1300 – 1380 for the next weeks before the final top is reached. Yesterdays FED minutes suggest that we will not see a QE3 follow through as the pressure to exit is rather bigger starting this week as the ECB will start hiking rates this week. With QE2 stopping the FED funding the government it will be more important to bring the Dollar back on track to get foreigners to buy Treasuries. The problem is once that spiral is triggered the huge government borrowing costs will kill the economy as 1 % rise of interest across the yield-curve costs around 150 bil more just in interest. On the other hand that times 4-5 is stolen from savers currently in the USA alone as they get far to less interst as the real inflation is around 6% and even short term interest rates should be rather 7-8%. Compared to the 1 % they get savers lose hundreds of billions every year. Banks earn them on the other hnd with far too low funding cost same is true for the government. Mainstreet gets robbed sponsored by the Obama admin ( actually a REP president would not make any difference).

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~ by behindthematrix on April 6, 2011.

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