Latest Posts

  • Finance 0

    A Little-Known Indicator Sees VIX Soaring To 40

    When Morgan Stanley’s chief equity strategist Michael Wilson released his 2018 equity outlook earlier this year, one particular observation struck us: a curious correlation between volatility and the shape of the yield curve we had not seen anywhere previously. In his discussion in late November 2017, Wilson explains why he expected bigger volatility in the coming year, and why he thought”things will change in 2018″  he shows the following chart which illustrates an interesting relationship between equity volatility and the economic cycle. It shows that the 2s-10s yield curve tends to lead the VIX by 2 ½ years.   He ex...
    On April 20, 2018 / By
  • Finance 0

    British Pound Rally Running Out Of Catalysts

    The outlook for the pound, while still bullish, is looking less optimistic today. More specifically, factors including the ongoing slowdown in regional growth, lower expectations for a May rate hike, and significant speculator interest in the currency are hampering the rally. Following Brexit, the trade-weighted value of pound sterling (a measure of GBP relative to other currencies) hit an all-time low in October 2016. Thanks to strong European growth in 2017 and the pound’s low value, the currency has appreciated significantly since that time. This is particularly the case against the US dollar. The trade-weighted value of the pound is ill...
    On April 20, 2018 / By
  • Finance 0

    From Fake Boom To Real Bust

    More is revealed with each passing day. You can count on it. But what exactly the ‘more is of’ requires careful discrimination. Is the ‘more’ merely more noise? Or is it something of actual substance? Today we endeavor to pass judgement, on your behalf. For example, here in the land of fruits and nuts, things are whacky, things are zany. Last month, State Senator, Dick Pan, introduced Senate Bill (SB) 1424, which would require California based websites to utilize fact checkers to verify news stories prior to publishing them. Who exactly these fact checkers would be – the moral servants that would save the world from the ills of fak...
    On April 20, 2018 / By
  • Finance 0

    ECRI Weekly Leading Index Update – Friday, April 20

    This morning’s release of the publicly available data from ECRI puts its Weekly Leading Index (WLI) at 148.9, up 1.1 from the previous week. Year-over-year the four-week moving average of the indicator is now at 2.71%, up from 2.70% last week. The WLI Growth indicator is now at 3.2, down from the previous week. “Up is Down: Jump in AHE Growth Confirms Economic Slowdown” ECRI’s most recent self-published article briefly discusses the Average Hourly Earnings (AHE) and its recent increase but emphasizes the cause. AHE is a ratio: total weekly pay to total weekly hours. The increase in AHE is a result of a faster decline i...
    On April 20, 2018 / By
  • Finance 0

    Canada’s Future Is Not In Pipelines

    We must resist short-term focus and pressure to borrow more debt and waste more cash developing antiquated energy sources, and instead double down on developing longer-term prosperity and health with our vast sustainable resources. See Forget Trans Mountain, here’s the sustainable way forward for Canada’s energy sector: As of 2015, two-thirds of Canada’s power generation was from renewable sources, mainly hydro power. The share of renewables in Canada’s power generation is already among the highest in the world, exceeded only by Norway, New Zealand, Brazil, and Austria, and roughly the same as Denmark. Yet far more is possible. Canad...
    On April 20, 2018 / By
  • Finance 0

    Bitcoin Breakout?

    As you know, I don’t trade cryptos, but I find the charts of the big ones fascinating. Having risen about 30% since its last recent low, Bitcoin is at a bit of a “moment of truth”, since it is up against a key trendline, anchored to its nearly $20,000 high....
    On April 20, 2018 / By
  • Finance 0

    Inflation Or Employment

    Inflationary fears are growing and US rates continue to rise Employment has become more flexible since the crisis of 2008/2009 Commodity prices have risen but from multi-year lows During the next recession job losses will rapidly temper inflationary pressures Given the official policy response to the Great Financial Recession – a mixture of central bank balance sheet expansion, lower for longer interest rates and a general lack of fiscal rectitude on the part of developed nation governments – I believe there are two factors which are key for stock markets over the next few years, inflation and employment. The fact that these also happen...
    On April 20, 2018 / By
  • Finance 0

    Stocks, Yields Tumble After Draghi Admits “Growth May Have Peaked”; ECB To Delay QE Unwind

    As we have showed repeatedly over the past month, the European economic imploding, and nowhere is this more obvious than the Citi Eurozone Economic Surprise Index why will soon hit its post financial crisis lows. It appears that after weeks of dithering, someone at the ECB also figured out how to pull up this chart on their Bloomberg because moments ago, and one month after the ECB first admitted that things are not ok when the central bank cut its 2019 inflation forecast, arguably due to protectionism concerns… … Mario Draghi finally admitted what we all know: ECB’S DRAGHI EURO-AREA GROWTH CYCLE MAY HAVE PEAKED To be sure...
    On April 20, 2018 / By
  • Finance 0

    EUR/USD Elliott Wave View: Still Trading Sideways

    Short-term EUR/USD Elliott Wave view suggests that the pair remains in a sideways triangle range between 1.2554 and 1.2153 levels as mentioned in the previous post here. Until we break out of the range, we look for the sideways price action to continue. Triangle doesn’t have any particular trend, but it is generally a continuation pattern, thus the pair likely thrust higher to continue the previous bullish trend after the sideways action is over. If we take a look at the previous cycle from January 2017 low. The pair shows a higher high sequence thus the pair is favored to trade higher once triangle consolidation is complete. It’s import...
    On April 20, 2018 / By
  • Finance 0

    US Dollar Shows Strength Ahead Of ECB, BoJ Rate Decisions

    EUROPEAN CENTRAL BANK (ECB), BANK OF JAPAN (BOJ) HIGHLIGHT NEXT WEEK’S CALENDAR It’s been an interesting week across global markets, as earlier-week breakouts in both the British Pound and US equities were unable to hold, and we’ve already seen reversals to varying degrees in each of those markets. Last night’s Japanese inflation came-in at 1.1%, cooling from the 1.5% from last month and removing a bit of pressure from that theme of Yen strength that began to show in Q1. This opens the door to the possibility of a continuation of Yen weakness as we work deeper into Q2, and as we move into next week that theme will be in the spotl...
    On April 20, 2018 / By