Chris Ciovacco

Fear vs Greed

Reasons To Remain Open To Bullish Outcomes For Stocks

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Any data that tells us to keep an open mind about better than expected outcomes must be confirmed by the stock market; something that has not happened yet. For example, if the stock market is to rally for the next few months in a surprising manner, that is not possible as long as the S&P 500 fails to make a higher high above 2,134. Our market model does not make decisions based on what “may or may not happen”. Therefore, the only real value to the table and video above is to help us remain open to and prepared for all outcomes (bullish and bearish). A few reasonable S&P 500 guideposts relative to improving bullish probabilities include 2096, 2107, 2116, and 2134. Each push above a guidepost level improves the odds for the bullish case. Below these levels, the expression “the market has some work to do” applies.

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Could The Fed Trigger A Deflationary Slide In Stocks?

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Most economists and stock market participants believe that FED policy can exhibit a tremendous amount of power over the movement of the markets and market participants perception of the future of that policy can affect the market in the short run. The major exception is Robert Prechter who believes that “monetary policy doesn’t have a reliable effect on the stock market.” He recommends that you Don’t Get Ruined by This Popular Investment Myth. But in today’s post Chris Ciovacco of Ciovacco Capital Management looks at whether the FED could trigger a slide in the stock market. ~Tim McMahon, editor.

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QE Ending Or Just Getting Started?

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While the Federal Reserve has laid out specific plans to end their quantitative easing (QE) program, a new season of QE may be getting ready to kick-off across the pond. From Reuters:
The euro fell broadly on Wednesday, hitting a 19-month low against the Swiss franc, as speculation that the European Central Bank (ECB) will resort to quantitative easing was fueled by yet more bad news from the eurozone…ECB chief Mario Draghi fueled speculation that monetary policy would be further loosened in the eurozone over the weekend by saying the central bank would use “all the available instruments” to deal with the threat of deflation at the U.S. Federal Reserve’s annual conference in Jackson Hole. Developments on Wednesday only worsened the picture for the eurozone: data showed German consumer morale fell for the first time in 1-1/2 years, while Italy’s economy minister said the country must cut its growth forecast.

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Printing Press Battle

Currency Wars: Money Printing- Wind at Stock Market’s Back

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While common sense tells us “printing our way to prosperity” seems like an unlikely longer-term outcome, in the short run it can help push stock prices higher.  From Bloomberg: The global currency wars are heating up again as central banks embark on a new round of easing to combat a slowdown in growth.  The European

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Obama’s Comments Worry Stock Bulls

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Today Chris Ciovacco points to some other indicators that are beginning to turn negative.  Of course, we are coming to the end of the summer doldrums and so we could see a reversal of fortunes as we enter the fourth quarter but we still have to make it through the notorious months of September and October. Remember the ROC has not issued a sell signal yet but just a preliminary warning.

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