US futures are set to continue where they left off yesterday. The fact is that investors are finding enormously problematic to invest in the stock market when they look at the valuation table. There is no qualm that stocks are very expensive and there is a little or no value in them if you buy them now. According to the definition of the primary bull market, the second phase usually stays alive in the hopes that the markets will go up and this is what really we are experiencing today.
The earnings season will kick off today with Alcoa releasing their earnings after the market close and we will not be surprised if the final number is not booming because of the slowdown in China. The overall earning season is going to be extremely important for the bull, and the reason is guileless which is, a strong earnings represents a strong economy.
The most important level for the S&P is the 1830 and a break of this level could easily make the sell off more ugly. Another important factor to point out is that the margin levels are at its record, and if we start seeing the sell off picking up some steam then a lot of investors will be forced to close off their positions because of their margin requirement which itself will increase swelling.
The main focus for today in the UK will be towards its manufacturing and industrial production data which is due later today at 09:30 GMT. A positive reading here will once again going to surge the pressure on the BOE to increase their interest rate. Back in the US, we do have speeches from the Fed members and the focus will be towards the interest rate arena.
Disclosure & Disclaimer:
The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader. by Naeem Aslam