After holding very critical support Tuesday and rebounding into Wednesday morning, the S&P 500 is not only critical going into the FOMC today, but there are also three more major central bank influences prior to Thursday’s U.S. trading.
This “distortion” between “risk” and “return” has created a “bubble” effect in all global equity classes. I informed my subscribers to exit the SPX on Nov. 25, 2014 and to enter cash. Their equity risk exposure was reduced to zero. Momentum oscillators are now extremely overbought and are very clearly trending bearish. I wait for confirmation before entering any new long SDS and long VXX positions.