Weekend Market Outlook – ECB QE edition

Market Outlook entering the Week of Jan 25th = Uptrend

MOVING AVERAGES

  • Short-term (20 DMA): Uptrend
    With the exception of the Dow Jones Industrial, all the major stock market averages ended the week at or above their 20-day moving averages.
  • Intermediate (50 DMA): Uptrend
    With the exception of the NYSE Composite, all the major stock market averages ended the week at or above their 50-day moving averages.
  • Long-term (200 DMA): Uptrend
    All the major stock market averages ended the week above their 200-day moving averages.

COMMENTARY
High volatility continues to be the order of the day.

Price/volume analysis kicked of last week with an uptrend under pressure, but positive news from the European Central Bank put investors back into buying mode and the market into an uptrend.  A 1.2 trillion Euro quantitative easing (i.e. “QE”) program tends to do that.

Intermediate-term Elliott Wave Analysis returned to an uptrend (verses last week’s uptrend in jeopardy).  With regard to support levels, the S&P500 appears range-bound between 2,085 and 1,973 (~6%):

  • Resistance: 2,070 / 2,085
  • Support: 1,973 / 2,019

A boost from QE is nice, but may be short-lived.  The outcome of Greek elections is the wild card; in terms of the winning party, their stance on austerity, and the markets reaction to that stance.

The good news is that last week’s message still holds true:  you can harness a volatile market if your process is focused on a short-term time frame (1-2 weeks) and you have entry and exit signals to match.  If you have a longer time frame, these ups and downs can be emotional if you don’t trust your system.

Safe investors always protect against losses, regardless of the timeframe, because there are always new opportunities for those who still have money to invest!

For the detailed Elliott Wave Analysis, go to the ELLIOTT WAVE lives on by Tony Caldaro

Candlestick charts for US market averages

2015-01-25 – US Market Averages

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