Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Monday, the 25th of February.
In addition to the markets we normally report on, we will also be looking at the following markets using our Trade Triangle technology.
#1 MAJOR CONCERN
My number one concern, much like everyone else here in America, is the sequester on March 1st. This date is rapidly approaching and neither the Democrats nor the Republicans seem ready to compromise on this major challenge. The game of political chicken has been lifted to a whole new level of brinkmanship here the US. I am not sure that is in the best interest of the markets or the country. With the DOW and the NASDAQ indecisive at the moment, investors are losing confidence as they still feel shaky and have strong memories of 2008. Only the S&P remains in a positive mode and this is the one to watch carefully, in my opinion. Should this index breakdown and start moving lower, investors are likely to bolt for the exit doors.
#2 MAJOR CONCERN
My second concern is Italy. Yes that's right, the country Italy. I am not convinced that Italy has gotten over all of their major financial problems. Italy is the third most indebted nation in the world right now. They fall in right after Japan and the US. Remember, this country was the problem child of Europe after Greece and that still hasn't changed in my book.
The wildcard here is Silvio Berlosconi. Should Berlosconi be elected to the Senate, it would create a chaotic situation for Italy when the country can least afford it. With Berlusconi in the mix, I believe Italy would become socially and politically untenable. Last Friday, we talked about (EWI) which tracks the Italian index and we will be looking at that ETF again today. This ETF could give us a sign as to whether the situation in Italy is stabilizing and getting better, or deteriorating and becoming more volatile and negative.
STERLING IS NOT SO STERLING
Today will be taking a look at Sterling and seeing why it is not so "sterling" anymore, and why Great Britain was downgraded by Moody's. We will analyze the Sterling/Dollar pair using our Trade Triangle technology and see visually why this downgrade took place, what took place before the downgrade, and what the future may hold.
Have a great trading day,