A Triple Whammy Against the Canadian Dollar Spells Opportunity

triple whammy (Credit: peet-astn on Flickr https://flic.kr/p/2mHZyy5)

After Canada experienced a hot inflation print for the month of August (the Consumer Price Index (CPI)), I aggressively declared the Canadian dollar a buy, long Invesco CurrencyShares Canadian Dollar Trust (FXC) and short USD/CAD. I ignored the technicals of support at an upward sloping 50-day moving average (DMA) (the red line below) on USD/CAD … Read more

A Bearish Divergence Raises Prospects for Oversold Trading – The Market Breadth

bearish divergence (Credit: Joe Thorn, two paths diverge on Flickr)

Stock Market Commentary The stock market got a case of the uglies last week. The end of summer trading transitioned right into a swift drawdown for the stock market’s second of the three most dangerous months of the year. The fresh breakdowns in the major indices accompanied new lows for market breadth. Suddenly, what I … Read more

Buyers Push Against Topping Indices, Restart Overbought Conditions – The Market Breadth

push (Credit: Uphill Push by the_alien_experience on Flickr)

Stock Market Commentary The stock market delivered a gift on Friday as I scrambled to de-risk following the Bank of Japan’s drama on monetary policy. I braced for selling into bearish pressure and instead was pleasantly greeted by a broad push higher for stocks from the open. After the dust settled on the day, I … Read more

Flirting with Oversold Trading Conditions Ahead of the Fed – The Market Breadth

flirting with oversold (credit: Bob Doran on Flickr)

Stock Market Commentary: A sobering thought: American capitalism has yet to figure out how to sustain a stable banking system. The U.S. created the Federal Reserve system in 1914 as a response to the lessons from the banking Panic of 1907 and yet bank runs, bank panics, and bank failures continue to headline market dynamics … Read more

The United States Oil Fund and the Monday Blues

United States Oil Fund Monday Blues (Credit: Sunset on an empire by Jim_Nix on Flickr)

The United States Oil Fund, LP (USO) has declined six straight Mondays and seven of the last eight. Prior to this streak, USO only declined 39% of Mondays in 2022 (where the market was trading on the prior Friday). Overall, the split is essentially 50/50 with 19 Monday blues versus 20 Monday gains. In other … Read more

Stock Chart Reviews – Apple Takes the Lead Role In A Stock Market Running Low On Fuel

Stock Market Commentary I gave the summary for the week in my last “Market Breadth” post. I will just add here that the stock charts are full of images of a stock market running low on fuel. I tell just a small part of the narrative below. Stock Chart Reviews – Below the 50-day moving … Read more

Stock Chart Reviews: Snapshots from A Manic Market

Stock Market Commentary In last week’s decision on monetary policy, Federal Reserve Chair Jerome Powell directly and fully acknowledged inflationary pressures in the economy. Perhaps lost in the inflation buzz was Powell’s quick commentary on financial stability during the Q&A session: “…asset valuations are somewhat elevated, I would say.” Of course, various folks in the … Read more

Stock Chart Reviews: Snapshots from An Ugly Oversold Bounce

Stock Market Commentary The stock market rebounded out of oversold trading conditions but ended the week in ugly fashion. The combination produced fascinating snapshots of an ugly oversold bounce. Expensive growth stocks are rapidly falling out of favor while a convergence of negative headlines and uncertainties is painting plenty of ugly all over the stock … Read more

A Stock Market In Survival Mode – The Market Breadth

Stock Market Commentary I flipped bearish on the stock market over a week ago because of a significant breakdown in the S&P 500 (SPY). Moreover, the breakdown occurred alongside vulnerable breadth indices and a bottoming volatility index (VIX). As a result, when the index closed lower than the previous week’s low, I braced for follow-through. … Read more

A Test of the Stock Market’s Most Predictable Pattern – The Market Breadth

Stock Market Commentary The S&P 500 (SPY) is a key driver of the stock market’s most predictable pattern. The index’s relentless rise this year has held the majority of the trading action above the 20-day moving average (DMA) (the dotted line in the chart below). Brief dips below the 20DMA set up tests of the … Read more