Three Charts to Watch in the Week Ahead
Much of the coming action in the weeks ahead will likely key in on three of the Fed's intended QE3 performance targets: the banks, the dollar, and equities.
On a longer term basis, experiments like this open the door to wild speculation. And truth is, any economist or investor claiming to know exactly how this will play out one year, three years, or even five years from now is blowing smoke. We just don't know… but that's why investors have to limit their focus and follow the most important indicator available: price.
After the recent QE3 price burst higher, the S&P 500 (INDEXSP:.INX) spent the past week backing and filling. And looking at the daily S&P 500 chart below, it's obvious that this was long overdue. Dipping as low as 1450, some may argue that the "dip" is over, however, I believe that last week's low needs to be retested (at a minimum) and may very well give way to stronger support near 1440. On the flip side, if the dip is just a dip, and the low is in, then open gaps at 1478 and even as high as 1497 may come calling, however unlikely for this week.
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