“Stock market bubbles don’t grow out of thin air. They have a solid basis in reality — but reality as distorted by a misconception. Under normal conditions misconceptions are self-correcting, and the markets tend toward some kind of equilibrium. Occasionally, a misconception is reinforced by a trend prevailing in reality, and that is when a boom-bust process gets under way. Eventually the gap between reality and its false interpretation becomes unsustainable, and the bubble bursts.” – George Soros
No change to our recent discussions and bigger picture outlook. As we discussed yesterday, we have to be patient and let things play out especially post FOMC as we know that markets like to wait 24/48h before picking a direction.
Apart from the continued focus on how the indices react around our key bull/bear lines and the 200DMAs, today’s close will give us another important piece of information though the weekly candle closes.
Remember that we have a whole host of FOMC Members and Draghi speaking today so, on top of the usual US/CHina + Brexit headline risk, we will have to deal with the CBs too.
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