I am taking a closer look at a long-term chart of the US 10Y yield today, I consider this to be a very important chart. Why? Firstly, Government debt continued to sell-off yesterday, with bond bears spurred on by more hawkish remarks from Fed Chair Powell, and secondly, I prefer to look at yield charts as I consider that the data is clearer and not disrupted or...
After one of the most hawkish meetings in quite a long time from the ECB where they outlined a faster pace of taper and dropped their language regarding rate cuts, we thought that we would take another look at the Bund chart. We are taking a look at the long-term Monthly chart of the Bund continuation contract and we can clearly identify a top on the chart (looks...
Geopolitical events continue to dominate, and this is being played out in the markets as a bearish bias on risk assets and investors continuing to head to safe havens – one of which is the US Dollar. On the US Dollar Index chart, we have the 78.6% retracement at 100.785 (of the move down from the 2020 peak) and the 2016 and 2020 highs just shy of 104.00. But...
As traders unsurprisingly head to safe havens, one of the biggest movers has been the bond market, which has seen a vicious rally higher. I am having a look at the bond market this morning. How far will this rally go? This is a tough call to make but given the overhead band of resistance, which the market has reached, my suspicion is that we should at least see a...
Russia invades Ukraine is the headline and every market in the world it feels like is moving and it is very easy to feel overwhelmed almost to the point of panic, a very quick glance around the markets can see that gold is up, stocks down, the US Dollar is up, and oil looks to be heading above 100. It's hard to know where to focus one’s attention or even where to...
I wrote this last month: ……From a technical perspective, we are increasingly of the opinion that the market has topped longer term, and this is the start of a more significant sell-off. Why do we think that? 1. There is a clear top pattern between approx. 4500-4800 ish, which to our practiced eye looks like a head and shoulders reversal pattern (yes, its messy...
Geopolitical tensions are expected to remain in focus this week, who knows if Putin will invade or not, but it is helping lift gold in the interim. I wrote about gold last week, noting the buy signals on the daily and weekly DMI indicator (Directional Movement index) this has now been joined by the ADX breaking above 20 (Average directional index) which is...
During times of heightened volatility in markets, I have observed that markets have a tendency to mean revert to their long-term moving averages (my favourites are the 55 and 200-week moving averages) and I noticed this beautiful set- up on the IBOV weekly chart (Brazilian stock market). Not only did the market test and bounce off the 200 week-moving average twice...
Gold is starting to nibble through a medium-term pivot circa 1875/77 but has not quite managed to clear this band and looks set for a minor setback ahead of further gains. I tend to look at hourly and 4-hourly charts when I am looking to add to positions or for potential entry points, and I find a combination of clouds and Fibonacci work well to offer decent...
The US CPI is out on Thursday, which is key, but the reason that we think this week is important for the Dollar is a technical one. We had previously been viewing this as a potential bull flag, however last weeks price action has negated that view, why? When a market breaks higher from a bull flag pattern it tends to be quite dynamic and directional, the break...
I discussed my view on January 25th about the S+P being a potential top and identified a head and shoulders top. I said the following: 'If we are correct in our assumption that the market has topped, we may see a ‘return to point of break out’, where the market rallies back to the ‘neckline’ of the head and shoulders top. These reactions are frequently seen and...
Ok it is time to have a another look at EUR/GBP as the Bank of England expected to raise rates this week and here we are inching down to the 2020 low at .8275, which is looking exposed – failure here will target the 200-month ma at .8182. I have been a technical analyst for over 30 years and can categorically state that over time, markets tend to mean revert to...
The Fed left its policy settings unchanged following its January policy meeting as expected. While responding to questions from the press, FOMC Chairman Jerome Powell noted that there was "quite a bit of room" to raise the policy rate without hurting the labour market. Powell further added that inflation has gotten worse since the December meeting and reaffirmed...
The sell-off on the S+P 500 is finding some support from both cloud and Fibonacci support just above 4200, which prompted a decent rebound yesterday, so was this a simple correction and we should buy the dip or was this a start of a more significant sell off? From a technical perspective, we are increasingly of the opinion that the market has topped longer term,...
It is hardly surprising to see USD/RUB creeping through its 2020-2022 resistance line given the increasing tensions between Russia and the Ukraine. That gives us the fundamental reason, but how can the chart to help with our trading strategy when something is hard quantify from a fundamental perspective? Will Russia invade the Ukraine? Who knows, I was chatting...
Bund 10Y Yields are back above zero for the first time in a couple of years. We have been viewing the bond markets as building major tops for quite some time and if we take a look at the EU 10Y yield rate, which has just breached zero, we can see that there is clear evidence that rates are now in a longer term up trend and have been for well over a year. Note...
I was chatting to a techie friend of mine (Thomas Anthonj) last week and he told me to have a look at the gold/silver ratio as he suspected that it has completed the 5th wave of an Elliott wave count, so this morning I took a closer look and yes, I think he is right. In addition, the market has remained capped on the topside by its 200-week ma at 82.10 and we...
Scrolling around some charts this morning, I came across an example of a potential bull flag on the weekly US Dollar Index. Bull flags occur when a market has rallied strongly higher and this is followed by a short period of consolidation, think about what a flag attached to a flagpole looks like and this is essentially the pattern. They are complete when the...