Monday, July 18, 2016

Weekly Catalysts For S&P 500 Downside

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*We think the added liquidity by the ECB and Japan has contributed to the global liquidity spree supporting markets.
*The ECB has some major economic problems and could run out of bullets like the US.
*The US is out of ammunition and waiting for it's cue to tighten.
*Unless economic growth starts to accelerate we think inflation will be the main driver which is a negative.
*We expect a down week in the S&P 500.
The S&P 500 ETF (NYSEARCA:SPY) from Monday's open to Friday's close was up 1.2%. We had expected downside but the breakout caused follow through. We again expect downside this week. The world appears to have complicated itself in the matter of a few days and US markets now appear heavily tied to global decisions. Besides that the US markets look extended in the short term.
Typically our "weekly" focuses on catalyst events in the US.
This week though multiple global issues have cropped up which are tugging US markets.
They are:
1) EU, UK and Japan liquidity policies are helping jump US markets.
ECB meets pre-market Thursday and likely holds back from easing further.
2) Italian banking issues will be discussed at the ECB meeting.
3) US accuses Saudi Arabia of 9-11 involvement which comes ahead of an election.
4) Turkey attempted coup has failed, for now.
5) China ignores Hague ruling that the 9 dash line territory is not theirs.
6) Terror in Nice reminds the world that we are not as safe as we want.
US events we're tracking this week
1) Jobless Claims Thursday
2) July 27th FOMC Decision (Next week).
3) Earnings season

Chaim Siegel has been working with hedge funds and mutual funds as an analyst and PM his entire career. Chaim specializes in earnings and predicts, analyzes and reacts to earnings and earnings events as well as developing current company stories with a hedge fund perspective. If you want his analysis real time sign up to the right for real time email alerts. #in, $spy, $qqq, $iwm, $vxx, $ycs, $fxe, $EUO, $YCS, ^GSPC, INDEXSP:.INX, #elazaradvisorsllc, CME Globex: ES Disclosure: These trades can lose you money and principal especially when using leverage BY USING THIS SITE YOU AGREE TO TAKE ALL RESPONSIBILITY FOR YOUR OUTCOMES AND LOSSES AND HOLD BESTIDEAS, ITS CONTRIBUTORS AND ELAZAR ADVISORS, LLC HARMLESS

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