The Market Action: Stocks Preparing For Bernanke
The stock market is chopping around the flat line today as it digests the gains from yesterday. After a major technical breakout created a massive move higher, all eyes are turning towards an annual speech by Federal Reserve Chairman Ben Bernanke on Friday. The market is hoping and praying for some new stimulus measures to initiate growth in the U.S. economy. The markets will likely trend neutral to higher into that meeting as shorts continue to exit positions.
If Bernanke disappoints, the markets may see a pull back. However, based on the charts this pull back should not take stocks to new lows. This would just be a pull back that would ultimately be negated by a move higher next week. In addition, should Ben Bernanke deliver a positive statement on Friday, the markets could easily continue their party higher.
It is somewhat unlikely the Federal Reserve Chairman will give the markets actual action. However, positive backing to the economy and reassurance is likely to occur. Regardless of the comments Bernanke makes on Friday, and the initial reaction, the markets should chop higher into the holiday weekend of Labor Day. Upside potential on the SPDR S&P 500 ETF (NYSE:SPY) is first at $119.50, then $121.00.