ECB Set To Start Printing

After the boredom of being in cash for the vast majority of the 4% correction on the S&P 500 this year, I finally witnessed my first opportunity to go long yesterday.  Upon the close today my entire portfolio is up a healthy few percent.  The question is, is this the bottom of an extended move up or is history going to print a short term bounce and move prices lower.

Trading is a probability game, and just like the house, you need to know your probabilities.  I know from my indicators that it is highly likely that we will see a strong move higher soon.

The spanner in the works is the actual announcement after the ECB meeting tomorrow.  It is fairly well reported (leaked) that they will take steps to begin a European wide sovereign bond buying program to try and stimulate the Euro economy.  Earlier there were reports of 500 Billion, now there is talk of 1.2-1.3 Trillion Euro’s.  That is A LOT of money printing.  And despite what the doomsayers will say, in the short term, money printing is fantastic for the stock markets of the world, I think the Fed in the US has proven that since 2009!

This is a traders market, as printing money around the world on this scale certainly has its risks, but as a systematic trader, market crashes and corrections are simply opportunities…as long as you know how to get out near the top…

Market News:

U.S. stocks advanced on Wednesday, with Wall Street’s volatility unabated, as investors largely adopted the view that the European Central Bank would implement a large-scale bond-purchasing program.

UnitedHealth Group rose after posting a better-than-expected fourth-quarter profit; International Business Machines fell after the Dow component offered a tepid outlook; Netflix gained after the supplier of streaming videos reported earnings that beat estimates.

Multiple news outlets quoted sources in reporting the ECB’s executive board had proposed monthly bond purchases of roughly 50 billion euros in a quantitative easing program that would last at least a year.

The CBOE Volatility Index, a measure of investor uncertainty, fell 4.7 percent to 18.95.

Ahead of Wednesday’s open, stock futures maintained losses after data showing U.S. housing starts climbed more than expected in December in a hopeful sign for the sluggish housing-market recovery.

Thursday:

8:30 a.m.: Jobless claims for week ending Jan. 17

9: a.m.: FHFA home-price index for November

9:45 a.m.: Markit PMI flash for January

News Sources:  CNN Money & CNBC