Short term Elliott Wave view in EURJPY suggests that the pair has ended the cycle from 2/24 low (118.18) and the instrument is pulling back to correct that cycle before turning higher again. Primary wave ((5)) is currently in progress higher and the rally from Primary wave ((4)) low at 118.18 is unfolding as an ending diagonal Elliott wave structure where Intermediate wave (1) ended at 122.88. The subdivision of Intermediate wave (2) pullback is proposed to be in a double three Elliott wave structure where Minor wave W ended at 121.59 and Minor wave X bounce is in progress. The subwaves of Minor W looks to be in a zigzag Elliott wave s...
Britain reported a drop of 11.3K in the number of the unemployed, but the wage data is worrying and has the upper hand. Average earnings have slowed to an annual rate of 2.2%. Excluding bonuses, salaries are down to 2.3% y/y. Both are disappointments. The unemployment rate dropped to 4.7% in January, but markets focus on the money. GBP/USD slips to 1.2215. The UK was expected to report a small drop of 5K in jobless claims in February. The unemployment rate was predicted to remain unchanged for the month of January: 4.8%. Wages carried expectations for a slower rise of 2.4% after 2.6% in December. Excluding wages, salaries were also predicted...
Technical Analysis of the S&P 500’s current stock trend remains in tact That doesn’t necessarily mean that all the stocks out there are holding it together because most of them are not. But the large caps, the ones that really drive the market’s direction, like Apple (AAPL) for instance, is still holding it together and that is very important because it helps to camouflage some of the underlying weakness the market is experiencing right now. On a very short-term basis, this market is absolutely due for a bounce and it will probably happen sooner rather than later. The pullback that the market has seen since the March...
Last week we noted a survey from LendEDU which found that 31% of college co-eds spend at least some portion of their student loan debt proceeds to fund week-long hedonistic, binge drinking trips to Cancun and Daytona Beach for spring break. And, just to add insult to injury, 24% said they spend those taxpayer-subsidized loan dollars on drinking at school and 7% even splurge on drugs (see “31% Of College Students Spend Their Loans On Spring Break”). In light of those findings, it probably shouldn’t be terribly surprising that, according to new data published by the U.S. Department of Education, $137 billion of federal stu...
The core of the seasonal trade on home builders is closing out with a likely rate hike from the U.S. Federal Reserve. On Wednesday, March 15th the market expects the U.S. Federal Reserve to hike its interest rate by a quarter of a basis point (.25%). Up until now, the rate sensitive housing sector has performed exceptionally (and surprisingly) well. The iShares US Home Construction (ITB) stalled out for a month after the Fed’s December rate hike. Yet, it has rallied into March’s expected rate hike. ITB is up 14.8% year-to-date and has significantly out-performed the S&P 500 (SPY). Source: FreeStockCharts.com In December, 2015, I des...
The sentiment-linked Australian and New Zealand Dollars traded modestly higher while the anti-risk Japanese Yen edged downward in otherwise quiet Asian trade. Regional bourses played catch-up to losses on Wall Street but benchmark US (S&P 500) and European (FTSE 100) index futures traded higher, pointing to a rebalancing of risk trends back toward neutral ahead of the upcoming Fed policy announcement. A rate hike seems all but assured, with the priced-in probability of an increase implied in Fed Funds futures at 100 percent. Meanwhile, steady US economic news-flow and lingering fiscal policy uncertainty mean that the FOMC rate-setti...
WTI Crude Oil The WTI Crude Oil market broke down during the day on Tuesday, slicing through the hammer that formed on Monday. This is a very negative sign, and with the Crude Oil Inventories announcement coming out today it’s likely that there could be significant bearish news yet again. We are oversold, though, so quite frankly I would prefer to see a bounce that I could sell into. And exhaustive candle above would be a nice opportunity, and the $50 level above should be massive resistance. Ultimately, I think that the market should then go down to the $45 handle, which is naturally supportive and has been structurally supportive as well....
The euro has many forces moving it. The big political risk is the French Presidential Election. What can we expect for EUR/USD? Here is their view, courtesy of eFXnews: EUR/USD downside risks remains ahead of the French Elections, says Bank of America Merrill Lynch FX Strategy. In that regard, BofAML’s baseline does not include a Le Pen victory and as such still likes EUR crosses in the medium term, particularly EUR/JPY. However, BofAML sees a Le Pen victory as a low probability but very high impact market event. “If Le Pen wins, we believe that markets could price a breakup of the Eurozone immediately, rather than wait for a referendum...
Rising interest rates are supposed to draw investors away from equities and into the bond market but so far that hasn’t really happened. Despite the interest rate on the 10 year Treasury note increasing from 1.9% to 2.6% since the election, the S&P 500 has still managed to post an 11% gain during that time. The Federal Reserve is widely expected to raise rates again putting dividend-paying equities squarely back in focus. The Schwab U.S. Dividend Equity ETF (SCHD) has been one of my favorite large-cap dividend payers for some time. Using the Dow Jones U.S. Dividend 100 Index as its benchmark, the fund invests in companies that have bo...
When a company creates profits, it has a decision to make. It’s all between how much of the earnings they should pay back to shareholders as a dividend, and how much they should reinvest in the business. Keeping the earnings is known as retained earnings. Many investors can be led astray by the deceitfulness of retained earnings because on the surface it sounds like a great idea. Warren Buffett is a proponent of retained earnings, after all, his company Berkshire Hathaway retains all of its earnings. His argument is that the company can compound the retained earnings at a much higher rate than the investor can if it was instead paid o...