Global Macro: When Bernanke Speaks, We All Listen
NEW YORK ( TheStreet) -- Global markets have been rattled the past few weeks by uncertainty over central bank stimulus.
In late May, the Federal Reserve released what looked to be foreshadowing comments about an end to quantitative easing, and more recently the Bank of Japan failed to relieve the volatility that had crept up in Japanese markets. With central banks playing such an important role in the daily movements of financial markets, anything they say or fail to say is sure to incite a fury of activity.
This week Fed Chairman Ben Bernanke will speak on Wednesday, and investors hope he clarifies his statements from last month in order to bring back stability to world markets. The Fed may be the first to rein in stimulus among the world's major central banks, but actual tightening does not look to be a viable solution until possibly 2014.
The first chart to study below is of S&P Equal Weight ETF (RSP) over SPDR S&P 500 (SPY), which measures the S&P 500's market breadth. When the pair moves higher, it signals that a majority of the stocks in the S&P are taking part in the rally, a bullish indicator.
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