Wednesday, July 29, 2015

Same As It Ever Was

The Market Trend Model (data sheet) continues to show a negative bias as the market indexes have moved higher in what appears to be a reaction rally to last week's breakdown when the indexes moved back into their historically long and narrow trading ranges.

The Nasdaq (chart) and the Nasdaq-100 (chart) continue to hover near all time highs as both of these indexes hold above their respective 10-week moving averages. The S&P 500 (chart) also retook its 10-week moving average after undercutting its low from last week. The Russell 2000 (chart) continues to underperform, although this index appears finding support at its 40-week moving average.

All eyes are now focused on what the Federal Reserve may or may not do with interest rates in the second half of the year.  The Federal Reserve's stated policy of transparency appears to be completely absent as today's Open Market Committee statement left market participants guessing again about the timing and eventuality of the first interest rate hike in the U.S. since June 2006 (article).

At the moment the stock market appears to be in a holding pattern as both buyers and sellers wait for some type of catalyst to push the indexes one way or another. Whether the catalyst is Federal Reserve interest rate policy, company earnings, or some other as yet unknown remains to be seen. As usual, remain mindful that anything can happen from one day to the next.