The US dollar is making a comeback after the Trump Slump or Trump Dump. Fresh optimism about deregulation? Rising stocks? In any case, the US dollar is on the rise. US jobless claims were expected to rise back to 247K but actually jumped to 259K, worse than expected. Will this hurt the momentum of the greenback? The indicator reached a low of 237K according to the revised figure and occasional swings are not uncommon. Later, the US releases its new home sales. And EUR/USD, which has been relatively stable while other currencies moved in a more volatile manner, is feeling the heat. The pair is sliding by over 50 pips under support at 1.0710...
The market expectations for weekly initial unemployment claims (from Bloomberg / Econoday) were 244 K to 250 K (consensus 247,000), and the Department of Labor reported 259,000 new claims. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 247,500 (reported last week as 246,750) to 245,500. The rolling averages generally have been equal to or under 300,000 since August 2014. Analyst Opinion of Initial Unemployment Claims The trend of the 4 week moving average improved this week. This marks 98 consecutive weeks of initial claims below 300,00...
Thursday Market Commentary – January 26, 2017 Stocks Hold to Buy Near Term – The major market indexes all gapped higher yesterday with the Dow has now hitting new highs and forecasted still slightly higher near-term but watch out for a correction anytime now on all the indexes that would be similar to the correction that happened last year from August to November. Bonds Hold Neutral Near-Term – The selloff this week in the 10 and 30 Year T-Bond prices may not yet be over. The potential of a short-term move higher still exists but is not quite clear currently, so the forecast for now is hold or neutral. US Dollar Index Hold...
Identifying breakout stocks is probably one of the elementary techniques utilized by active investors. The reasoning behind this approach to stock selection is to identify which stocks are trading within a narrow band. These stocks are to be bought as soon as they move above this band and are sold when they fall below. In case a stock moves above this band, it usually gains momentum and offers the promise of considerably high returns. Identifying Prospective Candidates In order to identify breakout stocks, you must first determine their resistance and support levels. A resistance level is the barrier which must be broken so as to be identifie...
Inventories up and inventories down. Oil prices are conflicted about rising U.S. oil inventories versus a dramatic drop in global oil inventories. While the Energy Information Administration (EIA) reported a 2.8 million barrel increase, a report by Bernstein Energy is showing that global oil inventories have fallen by 24 million barrels to 5.7 billion barrels in the fourth quarter of last year from the previous quarter or 60 days of global oil consumption. It is obvious that we are seeing rising global oil demand against a backdrop of record compliance to OPEC production cuts. With the Dow breaking 20000 after an extreme period of sideways mo...
While all eyes are on interest rates in the Treasury market, an even more important global interest rate recently breached a key level for the first time since the financial crisis: the London Interbank Offered Rate (LIBOR). On December 29, 2016 LIBOR hit 1% for the first time in seven-and-a-half years. I wrote back in October of last year, when LIBOR had reached 80 basis points, that a move up past 1% could spell trouble for the credit markets. We have now reached that point and are starting to see signs of strain on which we need to keep a close eye. LIBOR is an uncannily accurate thermometer that measures the banking industry’s healt...
WTI Crude Oil The WTI Crude Oil market initially tried to rally during the session on Wednesday, but turned around to form a less than stellar looking candle. Because of this, I believe that the market is going to continue to consolidate overall. The $51 level below is massively supportive, and it extends all the way down to the $50 level. Alternately, the $55 level above is massively resistive. Ultimately, I think that this is going to continue to be quite a bit of a back and forth type of situation. Because of this, options may be the best way to trade this market but either way it’s going to be a lot of short-term trading in the meantime...
OVERNIGHT MARKETS AND NEWS Mar E-mini S&Ps (ESH17 +0.03%) are up +0.03% at a fresh all-time nearest-futures high and European stocks are up +0.22% at a 13-month high as global equity markets continue this week’s rally on expectations of stronger economic growth and government spending by the Trump administration. Stronger-than-expected UK Q4 GDP was positive for European stocks along with increased M&A activity that has also given a boost to European drug and healthcare companies after Johnson & Johnson acquired Swiss drug maker Actelion Ltd, for $30 billion. The rally in global stock prices has reduced demand for gold as a...
Historic Devaluation The Mexican Peso has been under significant pressure over the last year, and the current level of devaluation in the currency is historic in both nominal and real terms.In the first 8 trading days of 2017, the Peso lost just under 14% of its value against the US Dollar. The sell -off, which was both abrupt and significant, was serious enough to force Mexico’s Foreign Exchange Commission to intervene in the market, selling $2bln. Although the moved into USDMXN from 20.3 to nearly 22 is clearly significant, the sustained devaluation of the Peso over the last 30 months is unprecedented in Mexico’s recent economic history...