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S&P 500 Headed Towards 1250

Friday, 22 June 2012
* The S&P 500 is headed towards 1250

* Philadelphia Fed's plunged to minus 5.8 in May. Estimates: +10

* New orders -1.2 in May from +2.7 in April

* Inventories 4.5 down from 8.2 in April

* Number of Employees -1.3 from +17.9 in April

* Average workweek -5.4 from April's -2.3

* The Philadelphia Fed Index report clearly illustrates the concerns expressed by the FOMC and we now expect a 'forced' QE3 by the Fed by the end of 2012

* Fed, in our opinion, is in 'watch mode' to see if the economy can weather the rising risks while QE3 may likely me implemented around Oct/Nov depending on how much more the situation in Europe deteriorates

* EU crisis is worsening; solution is still far off; Greece still has not worked out how it is going to make money to pay back their loans; Germany insists that Greece must meet bailout terms; Greece faces €14.3 billion of bond expirations, interest payments from June through Aug

* Spanish situation worsening amid its banking crisis; Moody's downgraded 16 Spanish banks; Consultants report says Spanish banks need up to $62 billion to withstand a worse-case economic scenario should Spanish GDP contract by 6.5% and house prices fall by 60%

* In China, home prices declined in 46 out 70 cities in April. Wenzhou dropped 12.3%, Beijing fell 1% and Shanghai prices declined 1.3%. In March, home prices declined in 37 cities. Wenzhou posted the biggest decline for the sixth month. For the first two weeks in May, combined net lending for China's four largest banks was almost zero


So how can Investors make money in this market condition?


* Buy Bond ETFs

* Buy Gold

* Buy US Dollar against Major Currencies

* Buy Chicago Board Options Volatility Index

* Buy Indian Govt Bonds

* Buy Chinese Govt Bonds

* Receive 1 year & 2 year India/China Overnight Index/Interest Rate Swaps

* Buy Top defensive stocks at strategically low levels


To profit from further chaos and deterioration of the global economy, Join BluePhoenixFinancial.com for FREE Analysis & Strategy

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