The recent movements in the US market suggest that a strong pullback will take place soon.
In fact, the market is already trading inside a range since April 16.
Dow Jones - from 33.940 points to 34.110 points (rose 0.5% or 170 points);
S&P 500 - from 4.185 points to 4.192 points (very little change);
Nasdaq - from 14.090 points to 13.895 points (declined by 0.7% or 95 points).
One of the main causes is the decision of the Federal Reserve to uphold a super-soft monetary policy. The $ 120 billion stimulus and strong GDP report helped as well.
According to the latest data, the US economy grew 6.2% in the first quarter, thereby raising inflation to 4.1%.
Forecasts:
Dow Jones will range around 33.500 - 34.400 points;
S&P 500 will reach 4.100 - 4.250 points;
Nasdaq will hit 13.600 - 14.100 points.
Although the most probable scenario is a strong pullback, the US market could continue moving up. Its scale, however, will only be small.