Gold prices fell $6.89 an ounce on Tuesday but remained within the trading range of the past four sessions as the battle between the bulls and the bears continued. Investors cautiously await Fed Chair Janet Yellen’s speech at the central bank’s annual symposium in Jackson Hole at the end of the week. July’s disappointing inflation data had wiped out expectations for a Fed interest rate hike in September. From a chart perspective, the bulls still have the overall technical advantage, with the market trading above the weekly and the daily Ichimoku clouds. We have positively aligned Tenkan-Sen (nine-period moving average, red line) and...
On Tuesday afternoon, just before the close, we published a quick post on market breadth called “It’s Hard To Call This Healthy.” Essentially, that was just a short reminder that despite Tuesday’s rebound, this market is looking thin on all kinds of measures. The overarching point there, and in multiple other quick posts we’ve blasted out recently, is that it’s important to look under the hood. And because it doesn’t take much in the way of homework to do so, you won’t be afforded much in the way of sympathy if bad breath finally catches up to benchmarks that, while failing to floss, have managed to obscure the halitosis with...
“History doesn’t repeat itself…but it does rhyme.” – Mark Twain Just about every investor has an ETF of some kind in their portfolio going to work to make cash work on the side. However, it’s kind of tricky when the concept of ETFs have turned into a derivative product in everything but name only. Many investors will claim that ETFs are liquid, safe, and efficient…but actually, they said the exact same thing about mortgage-backed securities (MBS) prior to the market meltdown in 2008. In recent years, ETFs have been packaged in such a way that they are starting to resemble the financial engineering t...
Historically the annual Jackson Hole symposium has been a major market-moving event as it has traditionally been the venue where central banks make critical announcements such as Bernanke’s preview and hints of QE2 and QE3 in 2012, as well as Draghi’s suggestion of the ECB’s QE in 2014. As shown in the chart below, market reactions following these events have been material. This year, however, while there was a sharp build-up in expectations after several media trial balloons suggested that Draghi would unveil the ECB’s taper, the fact that the market sent the EUR just shy of 1.20 in frontrunning of this announcement, ...
EUR/USD 4 hour The EUR/USD failed to immediately continue with the bullish breakout yesterday and is building an expanded wave 4 (green) correction via a WXY (purple) pattern. A next breakout above the resistance trend line (red) of the contracting triangle pattern could see the continuation of wave 3 (blue). 1 hour The EUR/USD is building a smaller triangle pattern which are indicated by the support (green) and resistance (orange) trend lines. A break below support could see price challenge the bigger support zone (blue) and perhaps even the 23.6% Fib of wave 4 vs 3. A break above resistance could see price test the bigger resistance line (r...
1.20 remains close but a bit far for EUR/USD. The team at Bank of America Merrill Lynch explains the correlation with oil prices. Here is their view, courtesy of eFXnews: Bank of America Merrill Lynch FX Strategy Research notes that the rally in EUR/USD this year has been in part a result of a constant tide of negative US political news, reversing the USD-positive policy optimism at the start of the year but given the momentum, markets have started to consider the euro climbing above 1.20-type levels more persistently. “…We remain reluctant to look for EUR-USD to move persistently into the 1.20-range for now…And low oil prices remain ...
Podcast: Play in new window | Play in new window (Duration: 13:15 — 7.6MB) DOW + 196 = 21,899 SPX + 24 = 2452 NAS + 84 = 6297 RUT + 14 = 1371 10 Y + .03 = 2.21% OIL + .28 = 47.65 GOLD – 6.90 = 1285.40 BITCOIN + 0.17% = 4144.78 USD ETHEREUM + 0.44% = 324.14 The stock market is overvalued. Price to earnings ratios are too high. Investors are too complacent; the volatility index is still below historic average. The Federal Reserve isn’t just planning to raise interest rates but plotting a reduction of its $4.5 trillion balance sheet, which can add to the effect of monetary-policy tightening, further increasing borrowing costs. All good...
“Davidson” submits: There are many calls today for a correction, but economic activity continues to move forward and markets follow. Lately it seems many well-known and media-popular forecasters have called for another market/economic correction. Economic activity meanwhile continues to expand as reflected in the Chemical Activity Barometer’s(CAB) record high and the Bureau of Labor’s Job Openings report. The SP500 follows economic patterns as positive economic news continues to drag new investors into equities. Markets following long-term economic trends has been and continues to be our history. The market participants can be sorted ...
Gold prices edged lower as a recovery in risk appetite pushed Treasury bond yields higher alongside stock prices. The US Dollar also rose in tandem as improving sentiment echoed in a supportive shift in Fed rate hike expectations. Not surprisingly, this undermined the appeal of non-interest-bearing and anti-fiat assets epitomized by the yellow metal. August’s US PMI survey roundup is in focus on the data front, with the pace of manufacturing- and service-sector activity growth expected to accelerate. US economic news-flow has increasingly improved relative to forecasts over the past two months, opening the door for outperformance. Whil...
Asian stock indices are trading mixed today. The Shanghai Composite is lower by 0.29% while the Hang Seng is even. The Nikkei 225 is trading higher by 0.46%. US stocks ended higher on Tuesday as lawmakers’ comments on tax reform and the debt ceiling boosted investor optimism. Back home, share markets in India have opened the day on a positive note. The BSE Sensex is trading higher by 100 points while the NSE Nifty is trading higher by 45 points. The BSE Mid Cap and BSE Small Cap index both opened the day up by 0.6%. All major sectoral indices have opened the day in green with metal stocks, realty stocks and healthcare...