The FOMC caught many by surprise last Wednesday, myself included, as stock prices exploded to the upside and closed with impressive gains. It appears that the FOMC struck a good medium between slightly reducing their bond buying and declaring their plan to keep rates low for quite some time.My argument last week was that the threat of deflation would keep the Fed from acting. Obviously, it did not, though Mr. Bernanke did comment that “The committee is determined to avoid inflation that is too low, as well as inflation that is too high.”No matter what happens in the last two weeks of the year, 2013 will clearly stand out as a buy-and-hold year with index funds as the star performers. The iShares Russell 2000 Index (IWM) is currently up 34.1% YTD, followed closely by the 33% gain in the PowerShares QQQ Trust (QQQ).Both have done significantly better than the Spyder Trust (SPY), which is up 29.32%, and the 26.52% gain in the SPDR Dow Industrials (DIA). But will buy and hold work again in 2014?
USDCAD Technical Analysis (based on dailyfx article)
- USDCAD has broken out from years of ‘coiled’ price action, specifically an inverse head and shoulders (left shoulder in April 2010). This is the second breakout attempt (first was in July). - There is no chart resistance until the May 2010 high at 1.0853. An 11 year trendline is near that level. The objective of 1.1680 is in line with former inflection points.
Trading Strategy: I am long with a 1.0550 stop. Weakness below 1.0550 would suggest that the current breakout attempt has failed.
Happy New Year from Painter of Light Thomas Kinkade (January 19, 1958 – April 6, 2012) was an American painter of popular realistic, bucolic, and idyllic subjects. It is estimated that 1 in every 20...
Intraday Chart: On EURUSD we are still waiting on that three wave rally that could be seen next week. Ideally we will get a retracement back to 1.3700/30 area where former swing lows will turn into a resistance. We would be interested to go short in this area.