Central Bank Unease: Fed Caps Week of Emergency Actions As Markets Panic

In an earlier post on Sunday, I provided reasons to believe that the market was finally drawing a line in the sand for a sustainable bottom. With anticipation, I pronounced I would go on a shopping spreed down to S&P 500 (SPY) 2600. At the time of writing, it looks like I may have to … Read more

A Viral Cure from the Federal Reserve: An Ambulance Full of Rate Cuts

Fed to the Rescue If you are sitting at home wringing your hands about catching a virus from the outside world, I am guessing you are not exactly relieved to hear that the U.S. Federal Reserve may try to come to your rescue with more rate cuts. Yet, easy money is what central banks know … Read more

Forex Critical: The Euro Slices Through Downside Targets

At the end of last month I made the following claim about the euro in reference to EUR/USD: “The slide will likely take some time, but I fully expect EUR/USD to retest its low around 1.089 from September of last year. The current rebound looks like a technical break from many months of decline. At … Read more

Forex Critical: Waiting on the euro

“…do we need eight pressers per year, because a lot of analysts think, when you see the previews of the analysts, it is often no change, no change, no change for this year. Could be different in the future, but would it be something maybe the strategy will discuss on the frequency of the monetary … Read more

The U.S. Dollar Resumes Its Dance With Long-Term Support

The U.S. dollar index (DXY) has bounced along its 200DMA support all year long.

With the U.S. dollar index (DXY) last tested its 200-day moving average (DMA) support, I pondered the possibilities for a breakdown. The U.S. dollar index typically sustains moves through its 200DMA, whether a breakout or a breakdown, so I braced myself for the need to jettison my long dollar positions. Instead of follow-through, the U.S. … Read more

Forex Critical: Economic Fireworks Push Monetary Policy Further Into Retreat

The euro vs the U.S. dollar (EUR/USD) reversed its 200DMA breakout, but it still has higher highs and higher lows since the April/May double-bottom.

In the background of the growing euphoria in the U.S. over imminent rate cuts from the Federal Reserve is the growing weight of the steady descent of the economy in the eurozone. European Weakness The week started with the stock market’s first opportunity to respond to the declared truce in the trade war between the … Read more

Above the 40 (November 12, 2018) – First the Brakes, Now the Body Blow: Technical Damage Spreads

AT40 = 35.5% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 31.6% of stocks are trading above their respective 200DMAs VIX = 20.5 Short-term Trading Call: neutral Commentary via GIPHY The bears took back complete control of the market. Friday, they sent up the warning signal with the screeching of … 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 (February 27, 2018) – The Bulls’ Steamroller Abruptly Runs Out of Gas

AT40 = 31.2% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 48.0% of stocks are trading above their respective 200DMAs VIX = 18.6 (17.7% gain) Short-term Trading Call: bullish (caveats below!) Commentary During the thick of the sell-off earlier this month, I stated with tongue-in-cheek that Federal Reserve Chair Jerome … Read more

Above the 40 (February 14, 2018) – A Bullish Tech Breakout Underlines the End of Oversold Conditions

AT40 = 27.5% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 48.3% of stocks are trading above their respective 200DMAs VIX = 19.3 (drop of 22.9%) Short-term Trading Call: bullish PROLOGUE Valentine’s Day, February 14th, was a great day in the stock market and a fantastic validation of my strategizing … Read more