The holidays are approaching, and I am lucky enough to be travelling this year with my family. So there won’t be any comments attached to this week’s sentiment charts. I don’t have the time, and I won’t waste your time. That’s o.k. because as you know nothing has really changed in this market for the [...]
Figure 1 is a weekly chart comparing the Currency Shares Japanese Yen (symbol: FXY) to the i-Shares MSCI Japan Index Fund (symbol: EWJ). As you can see, these two instruments are un-correlated across multiple time frames. Figure 1. FXY v. EWJ/ weekly Figure 2 is a weekly chart of FXY. The double top is highlighted, [...]
For Wednesday’s FOMC announcement, the Rydex market timers were betting heavy that Bernanke and company would deliver. The Fed didn’t disappoint as they continue to keep their foot on the easy money pedal. Unfortunately, the market did its best to frustrate the most, and the early morning rally fizzled intraday. The Rydex market timers have [...]
Figure 1 is a weekly chart comparing the Currency Shares Australian $ (symbol: FXA) to the i-Shares MSCI Australia Index Fund (symbol: EWA). As you can see, these two instruments are highly correlated across multiple time frames. Figure 1. FXA (blue line) v. EWA (orange line)/ weekly I have a “sell” signal on both FXA [...]
Figure 1 is a daily chart of the S&P500 with the amount of assets in the Rydex bullish and leveraged funds versus the amount of assets in the leveraged and bearish funds. This data is hidden, but the ratio of bull to bear, which is depicted by the indicator in the lower panel, is 2 [...]
Figure 1 is a weekly chart of the Dollar Index (symbol: $DXY). In our last look at the greenback I stated: “in all likelihood, this is the end of the down trend for the Dollar Index”, and this is now fact! A weekly close over the high of the positive divergence bar (i.e., price bars [...]
Last week the price of crude oil lost almost 10% pushing our composite indicator that is constructed from the trends in gold, crude oil and yields on the 10 year Treasury back below the extreme line. See figure 1 a weekly chart of the S&P500 with the indicator in the lower panel. Figure 1. S&P500/ [...]
Like the markets, the sentiment indicators are in a state of stagnation. For 3 months now, investors continue to be overly bullish, insiders continue to sell, and the smart money remains indifferent. Not surprisingly over this time, the S&P500 has been stuck in a range too. A breakout and a move higher from this price [...]
J.B. Lenoir is another Blues performer who died too young. He was 38 years old having died as the result of complications from a motor vehicle accident. Lenoir was born in Mississippi and like many Blues performers, he made his way to Chicago in the late 1940′s and early 1950′s. He had gain some notoriety [...]
As price weighs heavy in my market analysis, I always look for methods that quantify the price action. For example, when XYZ stock goes up 3 days in a row, I want to know what does that may mean (if anything) for the future price of that stock. In my work, I have explored the [...]
In part 1 of this series, we looked at some tools that I use to evaluate the appropriateness of a trading strategy. In this article, we will explore the use of a filter to improve not only the reward to risk profile of the strategy but also the feasibility of implementing and trading that strategy. [...]
What seemed like a timely “call” back on October 8, 2009 “that crude oil could move significantly higher over the next couple of months” has kind of turned into a dud. Two weeks after this initial post, the United States Oil Fund (symbol: USO), the ETF that tracks crude oil futures, moved 14% higher. Since [...]
It’s Monday, and there is no better place to start the week with the only asset that has mattered for the past 8 months – the Dollar. Although Friday’s job report brought a spike in the Dollar Index, the down trend remains intact. However, the likelihood of the downtrend ending leading to a counter trend [...]
On Friday, yields on the 10 year Treasury spiked higher by little over 3%. Our composite indicator that assesses the strength in the trends of gold, 10 year Treasury yields, and crude oil is back into the extreme zone. This represents a headwind for equities. Figure 1 is a weekly chart of the S&P500 and [...]
The trading range that has developed over the past several weeks is emblematic of the cross currents confronting this market. New highs seem to be made daily and then boom, the rug is pulled out from the market, and prices plunge for a couple of hours. Buyers appear and back to the highs we go [...]
What Does That Mean?
This video is courtesy of CNBC, and it reports on Bernanke’s confirmation in the Senate Banking Committee. While the video is just reporting the news, focus on Senator Chris Dodd’s comments starting at the 50 second mark. In explaining the past year, Dodd states that Bernanke’s actions “prevented utter economic catastrophe”. This may be true [...]