Good Morning Traders
We are all back in the office this morning after the extended bank holiday weekend and we have al European markets open for trading. It is amazing to reflect back on last week as we saw the SPX make new historic highs and this was re-enforced by a strong close above the 1600 level. So we ask ourselves where to next? There has been a lot of speculation that we might see a 5-10% correction across some of the equity markets, as some analysts have called for some profit taking coming into the month of May, but the 'Sell in May and go away' ideology may be a thing of the past. It was normally seen as a time when traders would leave the office in May to attend summer events and take a break from the market after locking in some nice first quarter profits but with the advances in technology traders  can access the markets through a variety of mediums (Laptop, Ipad, Iphone) so I think this may be a thing of the past and I would take it with a pinch of salt.
The current environment is dominated by low interest rates and central bank aggressive easing policies and this is being reflected in the equity markets across the globe. In sort the SPX trades over the 1615 level, the Dow trades above the 14070 level, the Dax 8130 all of these levels in extreme over bought levels signalled by the RSI indicator. But there is nothing we can do and it is not a wise move to be fighting the central banks and their whatever it takes attitude. We saw last week that the ECB reduced interest rates by .25% in an effort to stimulate the Eurozone, and it was hinted that they would be keen to reduce interest rates going forward if things don't improve. This market will remain in a strong up-trend unless we get some significant news headlines, and as of yet there is nothing in sight to cause a turn around so expect to see markets move higher. Also take note that poor headline data will not be enough to trigger this correction it will in fact be seen as a catalyst for more easing or a reduction in interest rates so we will be faced with the 'Bad news is good news' scenario for the coming months.

In terms of the FX market all of the easing measures adopted by central banks should be negative for domestic currencies, but with all economies taking this approach the effects may be slightly diluted and not as drastic as previously expected.

In conclusion these are very unusual trading times and volatility is widespread across all asset classes, we have seen some of the safe heavens such as gold and silver react in a volatile manor, which has caused a rotation into the equity markets as investors hunt for gains. If there is one bit of advice I can give you, don't fight the central banks and don't look for a top in this market regardless if you feel that the market is too high, buy the dips as we continue to move higher.

@lowKeyCapital