The heck with the markets being in a soft patch, it seams like we are literally stuck in the mud. It’s time for the politicians to get out of the car and each get behind the solution to the budget ceiling debate and push the car out of the mud so we can move on. Yes, they will get dirty and have mud on their suits, but that heavy lifting is what they are hired to do and they have used up enough oxygen in the room with their banter and bickering which has produced no resolution to the problems as of this morning. Fights over debt limit have long history that you can read more about HERE.
I hate to be Debbie Downer, but one should remain cognizant that the Greek budget crisis is not solved and in fact the solution that was agreed to a few weeks ago is still in play and funding solutions are not yet established as of today. The latest news on that front is that China Could Help Fund Greek Bond Buybacks. Bringing this discussion back home, the other issue on the horizon even after the budget ceiling limit is resolved in the next few days, there’s the whole topic of what happens if the US loses the AAA top-notch credit rating.
Here’s an interesting video from PIMCO’s El-Erian: U.S. Needs to Step Up
In terms of support and resistance, Long/Med term trends are up and the Short term trend is down. It’s not until there is a move above 1324 to perhaps indicate a change in the short-term back to an uptrend. As long as index stays above 1290-1300, it’s either consolidating or advancing. I see the 1290-1300, 1280 as the areas of support below. If things got REALLY bad, we highlighted that the 70 week moving average (350dma) has served as major support over the last 10 years. In terms of resistance above, I’m watching 1315, 1320, 1335 and 1345 as areas of resistance that are critical areas of resistance.