The US Stock Market Charts show numerous price movements closely bunched together, this indicates a great deal of indecision even amongst professional investment advisers as to where the market is going next.
The UK Stock market is in a similar position, although there is always is a summer lull with markets, in the UK this lull normally ends on St Leger Day (12th September). Normally from this day stock market activity picks up as there is increased buying activity resulting in higher stock market values by end of January.
Today is the big day for markets, as Janet Yellen will be announcing what is to happen to interest rates, there is a great deal of pressure on Janet Yellen to make a decision that results in an over reaction from US Investors thereby causing the US market to over-react. She is in a tough spot, this market is difficult to call.
That is going to be difficult as whenever you get a tight bunching of price movements over a period of time a chart break out normally follows, that could be up or it could be down.
Professional investment managers are taking no chances. Rumours are that professional fund manager Gervais Williams of Miton Fund managers (based in Reading) has taken out a PUT option on the FTSE as insurance for his portfolios. So if the market drops the PUT option will tend to produce a profit thus offsetting some of the drop in prices of a range of investments.
We advise that you stay cautious for a little longer and if you want to get back into the market – phase your monies in over time
