No one can tell you with any certainty what the stock marker with do on any given day, but one person I would pay attention when it comes to reading the market is Mohamed El-Erian, the ceo of PIMCO, the largest bond fund in the world.
“Liquidity is patchy, volumes are down, some bid-offer spreads are gapping, and there is little appetite among Wall Street intermediaries to warehouse risk – all pointing to some clogging in the pipes that allow for the normal and efficient functioning of markets,” El-Erian writes.
“Not surprisingly, signals of market stress are increasing, with a growing number of measures now flashing yellow and some on the verge of flashing red. The longer this persists, the greater the risk of very large market moves – in either direction, depending on the economic and financial catalysts.”
While El-Erian could be wrong, it is worthwhile to read his whole column.
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