Technical, fundamental and seasonal influences point to another volatile period for equity markets around the world this week, but with less intensity than recorded last week. A bounce from above lows set on August 8th at 1101.54 for the S&P 500 Index, 10,604.07 by the Dow Jones Industrial Average and 11,617.81 for the TSX Composite Index is a most likely scenario. A break below these levels is less likely, but is possible. A break below support, given the substantially oversold level of equity markets and most sectors, suggests minor short term weakness below support. Preferred strategy is to hold/add to sectors that benefit from favourable seasonal influences at this time of year (e.g. gold equities, agriculture, “gassy” equities) and to watch for entry points on weakness in other economically sensitive sectors in October.
Click here for his full, detailed report.
Vialoux also discusses what I think is the all important Federal Reserve meeting in Jacksonville, see my previous post, when he says:
Economic data this week is expected to be mildly positive for North American equity markets (Read: less bad than reports released last month). The focus is on the Federal Reserve’s annual conference in Jackson Hole. Last year, Bernanke effectively launched QE II at the conference. Equity markets rose sharply during the next five months. Will he launch QE III at this year’s conference?