The European Central Bank (ECB) announced a bigger than expected quantitative easing (QE) program to jump start the slowing economy in euro zone. Investors welcomed the easy money policy, and the positive sentiment drove up the major stock indices. For the week, S&P 500 index closed at 2051, up 1.6%. Dow Jones Industrial Average gained 0.92%, while Nasdaq composite index increased 2.66%. Going forward, the QE from ECB will lower the value of euro and drive up the equity value in Europe, which may impact US company earning and investors' asset allocation.
Technically, we got the rebound we would like to have a week later in S&P 500 index. Both weekly chart and daily chart display favorable pattern for the next few weeks. In the weekly chart, the index bounced above the 28 week moving average again this past week the third time, and poised to rally forward. The technical pattern in the daily chart also indicated that a short term rally is coming: the STO indicator is moving upward above 50 and the MACD is turning positive with the black line cross above the read signal line.
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| Weekly chart of S&P 500 Index |
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| Daily chart of S&P 500 index |
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