JohnKicklighter

JohnKicklighter

The five-week rally for the SPX that we just concluded with a down week on Thursday's close was the largest since the climb that ended at the beginning of November. Looking back, it seems the duration of rallies are growing shorter - albeit modestly. I won't write off the possibility of a new record high over the next month; but I do believe that medium-term, we...

JohnKicklighter

There was considerable capitulation across 'risk' assets this past week. The question is how far the towel is thrown. Merely a pause for liquidity or the snap from reality that spurs full profit taking?

JohnKicklighter

...which makes it that much more interesting that we are testing a round psychological level like 1,200 as a channel top.

JohnKicklighter

We have been watching the volatility for the Yuan/Renminbi as a signal of the market pressure levied on Chinese officials. However, that is only one stress point for the financial-economic balance the government is trying to strike. Another FX outlet is the HKD which is the gateway for much of the capital flow into and out of China. And, where USDCNY may have...

JohnKicklighter

USDCAD was already driving to multi-year highs and as of this week running a remarkably consistent advance. Now, that run is 9 straight days. There are only two other climbs of this magnitude since the turn of the millennium. If Friday closes green (bumping it to 10 days), it will be the first such move since 1999.

JohnKicklighter

Like most Yen crosses, the GBPJPY has dove hard these past few weeks - though this is one of the more attractive technical pictures among the group. After marking a strong break of its bull trend, now facing the next major level of support around 169.50. This is a moderate tech floor. Meanwhile spot is the furthers from the 200-day MA since October 2011 - so...

JohnKicklighter

Like GBPNZD, NZDJPY is a pair that is meeting considerable Kiwi resistance. Here, the combination of a frequented pivot (played support and resistance), 200-day moving average and 50% Fib set a ceiling between 83.50 and 84. The RBNZ will have a big say in whether this upswing stalls or extends to a lasting break. I spoke about this setup and others in my...

JohnKicklighter

There is a strong mix of technical support near where GBPNZD closed out this pas week. A confluence of the 200-day SMA, a five-month trendline and two major Fib retracements all fall around 2.23. See my full run down of this and other FX trade setups in my weened trading video:...

JohnKicklighter

It was an unexpected reaction. Even if you believed the Short Euro and Long Dollar views were crowded due to the popularity of divergent monetary policy trades in the FX market, the extent of the EURUSD's rally after the ECB upgraded its QE program was exceptional. It was the biggest rally since 3/18/2009 and backed by the heaviest volume we have on FXCM record...

JohnKicklighter

Here we have US jobs figures versus the change in US nonfarm payrolls. At the extremes, the correlation is negative - dramatic job loss is usually indicative of economic and financial instability that revives the currency's safe haven status. For now, the robust figures look to be a bullish support.

JohnKicklighter

The SKEW Index is a measure of tail risk - volatility measured from unexpected moves that fall outside 2 standard deviations. It has been erratic as of late, and day-to-day changes are likely more a liquidity reaction. Much more important is the general trend of the indicator. The 20-day (1 month), 50-day, 100-day average for the risk metric is just off its...

JohnKicklighter

What are we to make of a drop from the USDollar on a day when the probability of a December rate hike moves even higher - from 68% to 72% according to the CME's Fedwatch measure from Fed Fund futures? Relative monetary policy has been a tremendous and consistent driver for much of the FX market for the past months, so it is unlikely that it is suddenly rendered...

JohnKicklighter

When an underlying drive of risk trends - either appetite or aversion - is fueled by conviction, it is a market-wide sentiment. When the appetite for return or fear of loss grows increasingly more extreme, the need to reposition spreads to all corners of the financial system. So how strong is 'risk appetite' today? Rather than using the S&P 500 or any other...

JohnKicklighter

The Fed's rate hike has been pegged as one of the greatest risks to the future of the financial system - not that it is immediately a threat, but the uncertainty is brings is troubling. However, we have seen the market move to price the possibility of a December hike into the markets (here 2-year yields). In the meantime, the China economic-financial strain has...

JohnKicklighter

The recent swell in rate expectations following the October rate decision and NFPs returned the Dollar to bullish progress stalled after the April double top set a 12-year high ceiling. Yet, now with resistance cleared, will there be enough fuel to generate further follow through? Is there enough untapped speculation to extend this phase? Yes, but it will be tough.

JohnKicklighter

Looks like Monday's swell in risk trends - in equities across the world and also across asset types - was limited in conviction. The appetite for the run stalled at the same technical impediment for the break last week: the 200-day SMA. If this extends the retreat, it will look like a good cue for risk aversion across multiple assets.

JohnKicklighter

The opening move by the financial markets followed the lines of risk aversion. In the wake of the Paris attacks, caution was an understandable response for global investors. Yet, the initial move to risk aversion that would depress global shares and boost the US Dollar lifted later in Monday's session. Equities (here the S&P 500) recovered lost ground and more,...

JohnKicklighter

There is considerable fear in the market that the start of rate hikes by the Fed would mean the kiss of death for equities. While there are characteristics of the past six-year stock climb that suggest a withdrawal of easy money could lead to deleveraging (such as moral hazard leading to excess leverage), there isn't a historic connection that says this is an...