The Euro may have started a significant trend reversal against the British Pound, marked by a break of supporting guiding the rising trend since mid-July. The turn lower followed after prices failed to overcome resistance marked by the high set in the aftermath of the Brexit referendum near the 0.93 figure. Near-term support is now at 0.9091, the 38.2% Fibonacci retracement, with a break below that confirmed on a daily closing basis exposing the 50% level at 0.9025. Alternatively, a move back above the 23.6% Fib at 0.9174 opens the door for a retest of trend line support-turned-resistance, now at 0.9231. Technical and risk/reward parameters s...
If I had a bitcoin for every time some pundit declared bitcoin is a bubble, I’d be a billionaire. There are three problems with opining that bitcoin and cryptocurrencies are bubblicious: 1. Everything is in a bubble now: stocks, bonds, housing, heck, even bat guano is bubblicious. Exactly what insight is being added by yet another guru repeating the BTC is a bubble meme? 2. What’s the value proposition in declaring BTC is in a bubble? Spotting bubbles is like shooting fish in a barrel; the value proposition is in identifying the price/time tipping point at which bubbles pop. 3. Declaring bitcoin is a bubble is starting to sou...
From Reuters: President Donald Trump on Saturday said he would discuss the fate of a five-year-old U.S.-South Korean free trade deal with his advisers next week, in a move that could see him pull out of the accord with a key American ally at a time of heightened tensions on the Korean peninsula. This seems to me an ill-advised action, if undertaken, even on solely economic grounds. First, the US-Korea goods trade balance is improving: Figure 1: US-Korea goods trade balance, 12 month moving sum, in billions of US dollars, not seasonally adjusted. Source: BEA/Census via FRED, and author’s calculations. Second, the US-Korea goods trade balan...
From Reuters: President Donald Trump on Saturday said he would discuss the fate of a five-year-old U.S.-South Korean free trade deal with his advisers next week, in a move that could see him pull out of the accord with a key American ally at a time of heightened tensions on the Korean peninsula. This seems to me an ill-advised action, if undertaken, even on solely economic grounds. First, the US-Korea goods trade balance is improving: Figure 1: US-Korea goods trade balance, 12 month moving sum, in billions of US dollars, not seasonally adjusted. Source: BEA/Census via FRED, and author’s calculations. Second, the US-Korea goods trade balan...
Asian stock markets are lower today as tensions elevated on the Korean Peninsula early after North Korea said it tested a hydrogen bomb over the weekend. The Shanghai Composite is off 0.1% while the Hang Seng is down 0.45%. The Nikkei 225 is trading down by 0.86%. Back home, Indian share markets have opened the day marginally lower. The BSE Sensex is trading lower by 52 points while the NSE Nifty is trading lower by 18 points. The BSE Mid Cap and BSE Small Cap index opened the day on a flat note. Sectoral indices have opened the day on a mixed note with metal stocks and auto stocks leading the pack of gainers. While, bank st...
EUR/USD made a round trip to 1.2070 before falling back down, well under the 1.20 level. This could influence the decision by the European Central Bank when it decides on QE tapering. Here is the view from the ECB: Here is their view, courtesy of eFXnews: BTMU FX Strategy Research notes that the important date for EUR monetary policy expectations remains 7th September. “We expect some change in forward guidance on QE and a clear signal from Draghi that a change in QE was coming. However, the lack of comment on the level of the euro by Draghi in Jackson Hole should not be viewed as indifference. We should remember Draghi’s previous mess...
Cummins unveiled a revolutionary new all-electric powertrain in a demonstrator truck to the media on August 29, a few weeks ahead of Tesla’s planned revealing of its own electric “semi” truck. The truck is not self-driving, yet it fills a direct need in the path of self-driving trucks. SupplyChain reports Cummins Taking on Tesla with Electric Semi Truck. Cummins Inc. has unveiled plans for an electric truck, beating Tesla to the punch. Cummins late yesterday showed off its designs revealed a fully electric class 7 demonstration Urban Hauler Tractor, adding to its portfolio of environmentally friendly engines. The lighter, denser batter...
A little over a week ago, I explained why I put the Mexican peso and the Canadian dollar (FXC) on shorter leashes. Canada’s extremely strong second quarter GDP report at the end of August just loosened that leash a little. Statistics Canada reported 2Q real GDP growth of 1.1%. The annualized growth rate of 4.5% was a blistering pace that hurtled the real GDP 2Q growth in the U.S. of 3.0%. Combined with the strong growth in the first quarter, Canada experienced its strongest first half of a year since 2002. Given this growth occurred during a period of generally declining oil prices, it seems the Bank of Canada succeeded with its strategy ...
Sorry I didn’t publish any posts last week. I have been on vacation and out-of-town. I brought my laptop with me, and I thought I was going to have time to post, but it turned out to be a much busier vacation than I expected. The short-term trend is up. The PMO index is confirming. The Long-Term Outlook The ECRI index has now dipped below the 2% level, and the ECRI has stated that we should expect an “economic slowdown ahead”. M2 growth is also weak, and the combination of weak M2 growth and a weak ECRI index raises the caution flag for the long-term outlook for stock prices. We’ve all been witness to the ability of st...