—
Daily Gains Letter (www.DailyGainsLetter.com), an e-letter published by Lombardi Publishing Corporation, a 28-year-old consumer publisher that has served over one million customers in 141 countries, is cautioning that global economic indicators point to a possible stock market correction.“The stock market charts are showing hesitation once again following the recent technical breaks to new record highs for the S&P 500 and Dow Jones Industrial Average,” says financial analyst George Leong. “The blue-chip DOW is struggling near 17,000, and its continued failure to hold after breaking above 17,000 for the fifth time is a red flag that suggests more weakness and vulnerability could be in the works for the stock market.”
Leong explains that small-cap stocks are also subject to some selling again, with the Russell 2000 declining to below both its 50-day and 200-day moving averages earlier in the week. The breach of the moving average is worrisome; the index will need to find support at current levels or risk a fall to the 1,140 level.
Leong notes that while there is potential for higher gains on the stock market, there are numerous indicators pointing to broader weakness. For one, the surfacing of soft economic news for the global economy is an overall concern for economic growth. The European Central Bank (ECB) recently launched fresh stimulus for the eurozone and the Organisation for Economic Co-operation and Development (OECD) just cut its outlook for the eurozone’s gross domestic product (GDP) growth, revising it to a paltry 0.8% this year and 1.1% for 2015. (Source: “Global growth continuing at a moderate pace, OECD says,” Organisation for Economic Co-operation and Development web site, September 15, 2014.)
“The OECD also slashed its outlook for U.S. economic growth to 2.1% for this year, which means we could be heading for a bad third and fourth quarter. Another concern is continued evidence of slowing in the Chinese economy; in China, the industrial production for August increased at its slowest pace in more than five years, as did the retail sales metric,” Leong adds. “Moreover, the OECD estimates that Japan, despite its massive stimulus strategy, will see its GDP growth come in at a mere 0.9% this year and 1.1% in 2015.”
“There is no catalyst for the stock market to rise higher at this time,” Leong concludes. “Investors should watch for a potential downside stock market correction that they can hedge against through the use of put options on stock positions on the key stock market indices.”
For more information on Daily Gains Letter, visit www.DailyGainsLetter.com.
Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation, visit www.lombardipublishing.com.
Contact Info:
Name: Wendy Potter
Email: Send Email
Organization: Lombardi Publishing Corporation
Address: 350 5th Avenue, 59th Floor, New York, NY 10118
Phone: 905 856 2022
Website: http://www.dailygainsletter.com/
Release ID: 63393
Google
RSS