Emerging Currencies: Turkish Lira, South African Rand, Mexican Peso

When a financial market gets expensive, traders and investors start broadening their search for low-price opportunities. As an overbought U.S. stock market hits the late stages of an impressive rebound from March’s crash, its stock market looks expensive. Meanwhile, “emerging market” currencies like the Turkish lira, South African rand, and the Mexican have barely started … Read more

Forex Critical: Mexican Peso Hits Key Milestone After USMCA Passage

The U.S. Senate approved the U.S.-Mexico-Canada Agreement (USMCA) trade agreement on Thursday, January 16th. That timing may mark a major milestone and turning point for the Mexican peso against the U.S. dollar (USD/MXN). The following day, USD/MXN sliced through the low of 2019 and hit a 17-month low. I have been bullish on the Mexican … Read more

Rate Cut Promises Rescued A Stock Market Near Oversold – Above the 40 (June 7, 2019)

AT40 = 38.9% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 44.8% of stocks are trading above their respective 200DMAsVIX = 18.9Short-term Trading Call: cautiously bullish Stock Market Commentary From opening at the edge of oversold trading conditions to closing on near panic buying, last week was a wild week! … Read more

Stock Market Indices Break South On Expanded Border Tensions – Above the 40 (May 31, 2019)

AT40 = 23.8% of stocks are trading above their respective 40-day moving averages (DMAs) (hit a low of 20.7%)AT200 = 36.9% of stocks are trading above their respective 200DMAs (2 1/2 month low)VIX = 18.7Short-term Trading Call: neutral Stock Market Commentary So much for the potential for follow-through on bullish divergence! Perhaps the failure is … Read more

Forex Critical: Mexican Peso Races Past Border Threats

When U.S. President Donald Trump threatened to close the U.S. border with Mexico last November, the U.S. dollar was in the process of making a major top against the Mexican peso (USD/MXN). When Trump threatened a border closure again on March 29th, oddly enough, a minor relief rally in USD/MXN came to an end. At … Read more

Forex Critical: Mexican Peso Weakens As Traders Bail on Emerging Market Risks

In my post reviewing the strength in the U.S. dollar index (DXY), I neglected to note a related weakening in the Mexican peso. On Friday, USD/MXN rallied into its 200-day moving average (DMA) and faded. Per my plan, I faded USD/MXN at the 200DMA. Much to my surprise, USD/MXN readily backed off 200DMA resistance. I … Read more

The U.S. Dollar Idles While Rate Hike Odds and Trade Pressures Creep Higher

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

Above the 40 (June 15, 2018) – A News-Packed Week Hands Victory to Stock Market Bulls and Bears

AT40 = 64.0% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 54.8% of stocks are trading above their respective 200DMAs (a 4-month high) VIX = 12.0 Short-term Trading Call: bearish Commentary Once again, a tried and true bearish signal delivered. However this success came with a tremendous caveat: a simultaneously … Read more

Forex Critical: The Latest NAFTA Scare Reverses for the Canadian Dollar and Mexican Peso

Last week, financial markets were abuzz with rumors that Canada was preparing for the U.S. to exit NAFTA, the North American Free Trade Agreement. No official statement ever emerged and within three trading days the entire impact of the scare reversed. For example, the rumors weakened the Canadian dollar (FXC) significantly against the U.S. dollar … Read more