From the desk of Joe Rios

In the week ahead trader’s focus will turn to Europe with the Greek elections and more European Central Bank QE analysis.  Last week the European Central Bank announced its plan for securities purchases designed to help the euro zone’s economy. A trend that began with the Federal Reserve, the Bank of England, and the Bank of Japan, the ECB will embark on its own quantitative easing, purchasing 60 billion Euros of securities per month, beginning in March.  Other central banks are also following, last week Denmark lowered its key policy rate further below zero, Canada made a surprise cut in its key rate to offset the weakness in its oil-dependent economy.The question now is how the ECB’s new policy will impact the financial global markets in the future.

The spike in volatility in the global financial markets we witnesses the last quarter of 2014 seem to be extending into 2015. In the currency market the Swiss Franc spiked 13.2% while the Euro slid -7.4% and the Canadian dollar lost -6.4%. In the energy market Crude Oil continued to trader lower by -15% while Natural Gas gained 2.7%. In the metals market Silver traded higher 17.5%, Gold rose 9.3% while Copper dropped -11.7% in just three short weeks. Take special note that the US stock indices have remained relatively unchanged. The recent activity in the market’s correlations and  behavior is suggesting the markets message to be one of uncertainty among key market participants. This back drop can represent ideal trade set ups for our style of trading.  Therefore in the week ahead, I will focus on the correlations for the major benchmarks for insight to clarity, the break-points for price direction and the ideal markets to trade. In our effort to help train our members, we have chosen to speak and teach our views on this currently relevant topic about market behavior for this week’s training workshop on Tuesday evening.

Joe Rios – Chief Strategist