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TOPIC: Thursday January 21, 2015 Market Bias: Bullish

Thursday January 21, 2015 Market Bias: Bullish 5 years 1 month ago #10746

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Thursday January 21, 2015
Market Phase: Warning, Market Bias: Bullish
Last Candle Pattern: Bullish Three Outside Up
P&F Pattern: Bullish Column of X's Reversal
S&P 500 Resistance: 2090, Support: 1990
Bullish New Moon

Mario Draghi and the European Central Bank announced a $1.1 Trillion Euros worth of quantitative easing, buying about $60 Billion Euros in bonds a month going forward. This move is designed to halt the deflation that Europe has been experiencing, and secondly to stimulate the economy. China did stimulus last year and the effects are now beginning to show up in their economy. Japan is maintaining their record stimulus as well. India is contemplating doing some stimulus of their own over the next few years. I would think it is hard to bet against stocks in this environment.

The US economy is still strong, rising mortgage applications and housing starts show a still slow but ever increasing housing recovery. Home prices are rising, and have been for a while now. Unemployment continues to trend lower, all other indicators are showing economic expansion, and the dollar is getting stronger with zero inflation. Corporate sales and earnings continue to grow, even companies that miss earnings expectations. Misses are very small and more a sign of over estimating rather than poor performance.

The Market, and by which I mean the S&P 500 or SPX has bounced once more off of the 120 day moving average and is currently right at the 50 DMA, Tomorrow we will find out if there is resistance there or not.

Money managers are now rotating into positions choosing winners and losers for the March – April run. Oil and Gasoline should pretty much be at the bottom, if not fairly close to it. Either way I guarantee we are much closer to the bottom than the top. January typically has the lowest gas prices of the year and after Martin Luther King day gas prices tend to rise through to about the July fourth weekend when demand is highest and prices spike.
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