[Chart courtesy of MarketWatch.com]
1. Moving the Markets
Markets took a quick but short dive after the Fed’s announcement that its monthly bond buying program had come to an end. The major indexes recovered into the close but ended up on the south side of the unchanged line.
The end of this quantitative easing program came as expected with the Fed expressing confidence in the “economy’s prospects.” With this driver of the markets being gone, at least for the time being, we have reached the point where the rubber meets the road. In other words, can the economy stay on its own two feet with enough momentum to keep the market indexes at these elevated levels?
My guess is that we’ll find out pretty soon once the earnings season has died down. The question in my mind is whether the Fed will have the nerve to not step in with another emergency QE program should the markets retreat by some 10% or more.
In the meantime, we will hold on to our invested positions subject to our trailing sell stops and/or trend line breaks of the TTIs.