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2012/06/16

Weekly Wrap-Up

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June 16, 2012
Weekly Wrap-Up
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Weekly Wrap-Up

By IFII Staff

Weekly Wrap-Up


Big T's Takeaways

Last week's market action left me with the thought that, should the pro-austerity crowd get elected in Greece this Sunday, we could actually see stocks drop on Monday!

Why is that, you ask?

For all of this week, stocks have been gunning higher on the expectation that the anti-austerity party will win, and thus the ECB and the Fed will be forced to flood the world with even more cheap money.  This has not only boosted stock prices, but it has kited higher the prices of gold, copper and oil.

So as counter-intuitive as it may sound, perhaps we should be rooting for the anti austerity guys to take the reins in Greece!

Another news story to keep your eye on is the G20 meeting slated for next week.  Reports indicate that the US is going to push for the G20 to embrace growth over austerity, and that my friends could be a game changer.

We could be on the verge of massive, coordinated rate cuts, as well as other stimulative measures.  Clearly, drowning the world in cheap money is not a long term solution, but short term (at least until the election!) it could take this market higher.

The next key hurdle for the S&P 500 is the 50-day moving average, which lies at approximately 1,350.  A close above 1,350 will have us back to 1,400.

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