For a second straight day, the market closed poorly despite optimism over the possibility of another round of quantitative easing. In my view, the rising inflation figures, a meaningfully deteriorating economy, and the waning impacts of continuous QE aka Japan are all potential hurdles for another QE led really. Can it be as simple as last year’s rally after the Jackson Hole speech in August?
To make matters more complicated, we have issues in Europe hanging over our heads and House Speaker John Boehner calling a deal on the U.S. debt ceiling “a crapshoot.” We also have some key names reporting earnings tomorrow mainly JPM pre-market and GOOG after market. With the banks continuing to get sold, JPM’s earning would be important as it’s considered a leader in the large cap banking space. We also have SMH closing in on the 2011 low heading into the typical weak summer months for technology stocks. While past week’s rally on super breadth may be intermediate bullish, but I am not sure I like the double reversal today.
