ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
I am riding the long U.S. dollar index (DXY) trade based on two simple drivers: 1) a U.S. Federal Reserve pacing for four rate hikes in 2018, and 2) an expanding trade war, especially against China, which on balance will create more demand for U.S. dollars especially relative to those currencies who stand to lose … Read more
AT40 = 48.6% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 50.7% of stocks are trading above their respective 200DMAs VIX = 16.1 Short-term Trading Call: bearish Commentary The market’s gains the last two days validated my expectation for a relief bounce. I used this bounce to make more bearish … Read more
AT40 = 66.1% of stocks are trading above their respective 40-day moving averages (DMAs) (ended 1-day overbought) AT200 = 55.5% of stocks are trading above their respective 200DMAs (a 4-month high) VIX = 12.9 Short-term Trading Call: bearish Commentary Flipping short-term bullish was fun while it lasted…all of two days. The Federal Reserve hiked interest … Read more
The odds of getting four total rate hikes from the Federal Reserve this year are about as low as ever now. Even the odds for just 3 total rate hikes for 2018 are ominously converging upon 50/50. Source: CME FedWatch The chart above shows a 14.8% chance that rates will get to at least the … Read more
To-date, I have been extremely skeptical of the meme of four rate hikes in 2018. I thought that Thursday’s “weaker than expected” increase in the April consumer price index (CPI) would further confirm my skepticism. Instead, I discovered that the 30-day Fed Fund Futures are pricing in a 47.4% chance of a fourth rate hike … Read more