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    A Big Week for the Near-Term Rally

    Posted by nospam@noemail.com (Larry Berman) on 
    Monday, September 10, 2012 3:10 PM
    As far as the near-term rally continuing, this is a big week. Expectations that the Germany high court rules on constitutionality (Sept 12th) and ultimate backing of the $500B euro ESM (which is where all this potential bond buying will happen) alongside the FOMC (Sept 13th) on a much anticipated QE bazooka should have a big impact on whether this rally can continue. In terms of key levels, there is not much in terms of real important resistance at this point given the new highs. While the market is overbought and internals are not strong while bearish divergences build, the market should not be troubled much unless we close back below about 1395 (the lows of the past month). The trendline off the June and July lows is tracking up into the 1400 area this week. So we face another week of event risk and there are an awful lot of expectations priced in to the market. We should see a correction develop into mid-October, but no major setbacks until we see the results of the election and get some idea of what the fiscal cliff will look like in 2013.
     Default, Germany, QE, FOMC
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