Wednesday, May 20, 2015

No GoGo MoJo?

The Market Trend Model (http://bitly.com/M_Trend_Model) continues to show a positive bias as the stock market does its best to grind marginally higher.  And while the market trend is currently "up", the major indexes appear to be stalling out at current price levels.

The Nasdaq and the Nasdaq-100 look to be churning here as volume increased on Wednesday. Both indexes were unable to sustain any buying pressure and they reversed off their respective intra-day highs.  Also troubling is the S&P 500 hit an all time high on Wednesday, but reversed to close lower for the day. Lastly, the Russell 2000 weekly chart continues to be trapped in a bear flag price formation.

Adding to market angst is the admission by both the Bureau of Economic Analysis (BEA) and the Federal Reserve that statistics used to calculate U.S. economic activity have "issues" (http://ow.ly/NcZIx).  It appears the Federal Reserve not only has no idea what it is doing, but it is relying on flawed data to determine central bank policy.

According to Janet Yellen, "The Federal Reserve is already one of the most transparent central banks around the globe."  However, it seems to me the BEA and the FED just gave themselves carte blanche to throw out transparency and to change any of the economic data as they see fit.  

While the current stock market trend remains "up", be mindful that anything can happen in the market from one day to the next.