Saturday, January 24, 2015

QE Infinity Monte Carlo Style

The Market Trend Model (http://bitly.com/M_Trend_Model) moved to a positive bias on Thursday as the European Central Bank ponied up to the trough of quantitative easing.  Like a rally car sliding on the brink of disaster, the markets appeared to be spinning out only to come racing back when another central bank joined the QE Infinity club.  At the same time the world economy faces significant headwinds as slowing growth and deflation fears are of primary concern (http://ow.ly/HRsr8).

While the price component of the Market Trend Model moved to a positive bias, many of the internal components remain with a neutral to negative bias.  Additionally, the S&P 500 failed to retake its 10-week moving average for the third consecutive week.

Stocks have been under distribution since the beginning of 2015.  Even with this week's QE rally, the S&P 500, Russell 2000, & Dow Jones Industrials have printed a series of lower highs and lower lows.  The Nasdaq and Nasdaq-100 managed to marginally poke above their previous week's high.

At the moment stocks remains a slosh pit of volatility as the general market searches for a clear direction.