Wednesday, March 11, 2015

Market Headwinds Blowing

The Market Trend Model (http://bitly.com/M_Trend_Model) remains with a negative bias as the Nasdaq (http://scharts.co/1EsTYwz) finally joined the downtrend that began last week in other major market averages .  My expectation going forward is the market remains in a "slop 'n chop" stage as bulls and bears battle for dominance.

One particular technical indicator of concern is the weekly NYSE summation index (http://scharts.co/TUuRiH) which turned negative this week coinciding with  the S&P 500 losing its 10-week moving average.  My random thought here is that the stock market decline is a result of the strengthening U.S. dollar and weakening crude oil prices (http://bit.ly/C_Trend_Model).  I am looking for crude oil to test its January lows before the stock market begins to rally again.  I must stress this is merely a random thought and not a trading strategy.

The most important determinant of the market's direction is the market direction itself.  At the moment stocks are facing headwinds and the market direction is down. Until the market begins to turn up, flying cows should be expected.