The range between 87.50 and 88.50 has been a significant zone for prices to trade at over the last 18 months. It was the high in the first half of 2017, and then the floor throughout the rest of the year, into 2018. Since September 2017, EURGBP has been falling back into this zone, forming a 5 month bearish pennant. This is marked in orange. Whilst this...
It would appear so. The NASDAQ has a clearly repeatable path that could be traded for profit. The graph shows the NASDAQ since 2014, with a trend channel plotted to show just how steady and contained the trend has been. The dotted line is halfway in the channel, and therefore represents the trend average. Prices above this line have a greater chance of...
Bitcoin's rally and subsequent rout is turning out to be a textbook example of a bubble. Witness the effect of group human psychology and behavioural biases, captured beautifully in Bitcoin's trading history.
Short 10 Year Italian BTP Futures as a hedge and catch up play with U.S. treasury and German Bund Yields.
The falling Dollar in 2017 helped push Gold prices back up to the $1200-1300 Oz. For the second time in 2 years the market is entertaining higher prices, and with momentum firmly upward. I would not be surprised to see a significant break above these levels.
The chart shows monthly bars on the NIKKEI 225 future. The index is returning to the 21000 key level, a level its failed to surpass since 1992. Price is above its 52 week Moving Average, and momentum is up for the only second time since the 1980's. Whilst the rest of the Worlds post Global Financial Crisis recovery began in 2009, Japan's was delayed until the...
Consumer Staples are breaking out of their highs, whilst the overall index driven by tech stocks is rallying on extreme momentum. Whilst the spread could widen further, the return to risk seems in favour of rotating into Consumer Staples, 30% behind in just 2 years. In 2007 to 2009 financial crisis, Consumer Staples fell only 30% against the broad market that...
I’m revising a sell target on cable up from 1.40 to 1.45. The strength of this rally is not to be ignored, and the change of tone by the US to welcome a weaker Dollar, can keep the momentum going. 1.40 was the key pre-referendum low, but now with trend surpassing 1.40 with continued strength, let’s consider GBPUSD on a longer time frame. The chart back to 2007...
This is the spread between the S&P 500 and the MSCI Emerging Market Index. Notice how the trend has switched in favour of being overweight EM, underweight US. The change occurred as inflation and GDP were upgraded in EM countries, causing the USD to fall against other currencies in 2017, as capital begins to flow out of the US in search of higher yields. The...
a. 1.3850 to 1.40 marks a zone that was the floor for prices in 2016. b. Cycles of 60 Days has been a consistent predictor the past year, we are in the cycle peak zone. c. The RSI is at extremes and previously at this level (see Oct-16) GBPUSD pulled back 3%.
Consumer Staples including Procter & Gamble and Coca-Cola are lagging the rest of the market by 20% in the last 12 months. This is extreme, and whilst the S&P500 has gained another 6% in 2018 YTD, these Consumer Staples firms have consolided near their highs. Yesterday's session saw them break through this ceiling. View: Long VDC, Short SPX as a defensive...
The difference between the US 10 and 5 year yield is down to just 20bps. The market is reflecting short-term growth and short-term Fed tightening, but sees inflation firmly anchored at 2% for the long-term. The fact that inflation is at 2% also keeps equity valuations up, but for how long? As the curve flattens to 2006 levels, are we 12-18 months away from an...
Using the Relative Strength Indicator the S&P500 is showing the third strongest run in 40 years... and surpassing the other two in Nov-1995 and Mar-1986. But don't try to call the top... In each case the S&P500 made higher gains, and momentum actually faded significantly before any major pullback. Major pullbacks are preceded by consolidating ranges (i.e....
EEM has today: a) dropped -1.8% on the day to complete a bearish Head and Shoulders pattern b) the relative strength has been declining since October c) the RSI is now below 50 d) the 2 days (6th and 7th Dec) that traded below 45.5 were early signs of a reversal, taking out the higher lows that were the hallmarks of 2017 Short-term target $44.
The last three sessions saw a reversal of the downward trend that began in March; note how yesterday saw Oil break above its downtrend. This key inflection is telling us buyers outweigh sellers when buyers would normally diminish. A move above $50 in the next few sessions highly probable. Aug & September is seasonally strong for Energy.
EURUSD is approaching 1.185 which is both the September low, and a bearish move below a clear head & shoulders pattern. 1.2 has been the key level that marked the multi-year low before the 2016 sell-off, and the market has failed to break above this in September. EURUSD would find buying pressure at 1.17, being the August low, and is my current price target.
Update on the S&P500 6 week cycles: the previous high on September 20th indicated a low to follow some time around 5th October. But as S&P500 faded, on last Monday the 25th, it found major support. This level was the August high - 2480. Buyers came in, broke the cycle and drove prices higher to today's all time highs. With now Monday 25th Sep marking the new...
Its worth considering what market cycles can tell us about when this run will end. I won't (can't) explain the logic behind cycles, but they appear in every aspect of nature, which includes human behaviour. Seasonality is a well known example. Using the Dow Jones as a barometer, its clear that there were 7 years between the 2002 and 2009 lows. We can't...