federalreserve-300x175Federal Reserve quantitative easing tapering is the overriding theme for the stock market.  St. Louis Fed President Bullard is speaking this morning.  Standard & Poor’s upgraded its U.S. credit outlook from negative to stable.  This is having little effect on the U.S. Treasury market.

The S&P 500 has regained roughly half of its loss since its 5/22 intra peak of 1,687.   A retracement of half is a fairly common chart pattern which many bears will say marks the short-term high.  Market action this week should give us much better insight into whether or not we are in the beginnings of a trend change.  The Delta market sentiment indicator remains bullish in the mid 60% range.  Our 18 years of institutional trading experience has taught us to stay with the trend until the technical indicators breakdown.  During major bullish runs, one of the most common mistakes is to take gains too early and miss much of the move.

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