Well, former FX trader Richard Breslow is right about one thing: there’s been no shortage of hyperbole used to describe what we’ve seen in DM rates over the past couple of weeks. [Note: those red highlights represent, in order, Draghi kicking off a parade of hawkishness by saying he’s going to “look through” purportedly “transitory” weakness in the incoming inflation data, and the sudden selloff in bunds that was triggered by a weak 30Y auction in France on Thursday] “Rout,” “tantrum,” “debacle,” – all words that been variously ascribed to what you see in that chart. And honestly, I don’t know what else you would...
The latest round of COT futures positioning data confirms a very interesting pattern that we have observed over the past year. There has been a massive swing in speculative futures positioning from extreme to extreme with commodities going from net short to 10-year highs on the long side – and then back. This has been mirrored in bonds where extreme longs went to short at the height of the reflation euphoria and then full circle to big net longs again. As discussed in the latest weekly report, it shows a complete reset and reassessment of the reflation theme, and as I always say, when you get extremes in an indicator like this you...
The silver price slightly crashed this week, as it lost 7.23 percent in just 4 trading days (COMEX trading was closed on Tuesday). We received many emails from concerned readers, and the common question was how deep the price of silver would still fall. Before looking into the details, we want to reiterate that silver is perfectly on track to meet our silver price forecast for 2017. Almost one year ago we were on record predicting that silver prices would fall in 2017, and presumably bottom in the second half of this year. We also appeared on MarketWatch in April calling for the silver price top of this year. Marketwatch interviewed ...
The Top 10 of the Ranking and Rating list for the coming week shows the following stronger currencies being well represented for going long: the CAD (4X) followed by the EUR (3X) followed by the NZD (2X). The weaker currencies are the JPY (4X) followed by the GBP (3X) and the USD (2X). By diversifying a nice combination can be traded in the coming week like e.g.: GBP/CAD with the NZD/JPY CAD/JPY with the EUR/GBP Ranking and Rating list Analysis based on TA charts for all the major currency pairs. Good luck to all. No advice, just info. Every week the Forex ranking rating list will be prepared for the weekend. All the relevant Time Frames wil...
The Q2 earnings season takes the spotlight with quarterly reports from the big banks next week, but companies with fiscal quarters ending in May have been reporting results already and these reports form part of our Q2 tally. Of such companies with fiscal quarters end in May, we have seen results from 23 S&P 500 members. This is too small a sample to draw any firm conclusions from. But for whatever it is worth, the growth and proportion of positive surprises for these 23 index members are tracking above what we had seen from the same cohort of companies in other recent periods. Q2 Estimates have come down since the quarter got underway...
Stocks end mostly higher on the first week of the third quarter. Stepping back, the market remains split. Tech stocks remain under pressure while the Dow Industrials, S&P 500 and Russell 2000 all closed above their respective 50 DMA lines. The bulls showed up on Friday and defended the 50 DMA line for the S&P 500 which is a near-term positive. Presently, the market is simply pulling back to digest the recent and very strong post-election rally. At this point, the pullback remains relatively mild/healthy. One or two good up days can easily set the market up for another leg higher. However, if the selling continues and the recent low...
Talking Points: US crude inventories fall but oil production increases. OPEC cuts and rhetoric currently unable to stem the losses. US crude oil remains stuck in a downward trend. Fundamental Forecast for Oil: Bearish US crude oil continues to fall, and is likely to fall further, as shale companies continue to increase production to near-record levels. After rallying sharply on Thursday on news of a larger-than-expected drawdown in oil inventories, US crude gave back all of its gains and currently trades at a two-week low around $44.51/brl. Crude is also nearly $3 lower than Wednesdays high of $47.35/brl. The latest downturn in oil was pro...
When the Fed announced that it had approved the CCAR submissions of all 34 banks it had reviewed, it was followed by a flurry of dividend raises and share buyback announcements. Citigroup (C), Bank of America (BAC) and Morgan Stanley (MS) alone authorized buybacks of more than $32 billion. The SPDR S&P Bank ETF (KBE) is up 3.5% since the CCAR results were announced while each of those three big banks is up roughly 5%. With many of the banks rallying following those buyback announcements, I received a couple of questions this week regarding the SPDR S&P 500 Buyback ETF (SPYB) and whether or not it might be a good way to capture the s...
Stocks rebounded on Friday on better than expected employment data. This weekend video is a crucial update on the markets. Watch this video right now to find out what has been working every week for us and the opportunities for next week. Join us next week for “Greek Week” which includes access to our trading room, coaching sessions, and trade alerts for next week....
Just this morning, in “‘The Clock May Stop Ticking’: Oil Price Rout Bites As HY Energy Issuance Plunges,” we noted that the downturn in crude prices (which, if this week was any indication, has morphed into a full-blown crisis of confidence) has finally caught up to the credit market, as HY Energy issuance flatlined in June: The problem with US production is that it has effectively been subsidized by the easy money regime. With rates perpetually suppressed and the attendant hunt for yield ongoing, otherwise insolvent producers were able to weather the downturn in prices, hibernating (as opposed to going out of business) only to reemer...