Fed Stimulus Has Created The 'Cobra Effect

published 26.07.2020 17:21

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In our last "risk/reward" update we stated: This week, that negative bias came into effect as the market failed to maintain its attempt to break out of the consolidation range.

As Jeff goes on to discuss, the actions taken currently though Fed stimulus to sustain the economy, and buoy the stock and bond markets, will eventually cause a bigger problem.

However, with a bulk of the S&P 500 earnings season concluding next week, we suspect the weakening economic data will collide with the more exuberant market sentiment in August and September.

The market did hold its rising bullish uptrend support trend line, which keeps the "bullish bias" to the market intact for now.

The market did hold its rising bullish uptrend support trend line, which keeps the "bullish bias" to the market intact for now.

by Lance Roberts from seekingalpha.com

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