This is another big week of decision points and catalysts for the market. Today's start of a 2-day quarterly Fed meeting that is due to deliver fresh FOMC economic forecasts and a Big Ben press conference, is also surrounded by expectations for another round of Large-Scale Asset Purchases (:LSAP), commonly known as QE3.
And Wednesday brings a judicial ruling from Europe that could greatly effect the other most important central bank in the world, the ECB, as the German constitutional court is due to deliver its assessment of the legality and proper uses of the European Stability Mechanism (:ESM) bailout fund.
Even if there are not legal and technical roadblocks to Mario Draghi's new sovereign bond-buying program, a major negative opinion of the plan from Europe's core financial and political power could cast doubt over its eventual implementation.
As if that were not enough uncertainty on the Euro-mess front, countries like Spain, which need the most help, still have not asked for that help and thereby submitted to required conditions of fiscal discipline and accountability. If they do not submit voluntarily and forge necessary agreements, no money moves to them.
Need something to worry about? This is just the stuff happening this week, set against the backdrop of uncertainties that could stand alone as formidable...
The US Congress and its ability to guide over the Fiscal Cliff (or not)
Slow, muddle-through growth in the US
PMI's still contracting around the globe
Earnings expectations for US corporates still high, still coming down, possibly rolling over
Conclusion: the market has been telling me since early August that all the bad news was priced-in and it would continue to climb over these worries, leaving many investors and bears in tears as it got away.
I see S&P 1420 and 1400 as good support and will buy all dips.
What say you? Have we run too far already? Will these worries return to the power and significance they held in May?
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