ETF Market Commentary In prepared testimony before the JEC (Joint Economic Committee) of Congress, Fed Chair Yellen confirmed a bias towards tightening monetary policy at the central bank’s upcoming December meeting. She also indicated her intention to serve until the expiration of her term in 2018, thus giving more time to clearly assess the impact of any forthcoming fiscal stimulus package under President-Elect Donald Trump. Today’s economic news was consistent with a data dependent Fed’s prevailing view that a return to normalization is still warranted. Real Estate / Residential: In October-2016, Housing Starts @ 1.323m vs e...
EUR/USD 4 hour The EUR/USD is in a downtrend after completing wave e (green) of wave 4 (blue). Price is still above the support levels (green) from the daily chart bottoms, which could act as potential bouncing spots. A break above resistance (red) trend line could start the wave 2 (green) correction whereas a break below the most recent bottom could see price extend wave 1 (green). 1 hour The EUR/USD could start an ABC zigzag (brown) correction within wave 2 (green) if price manages to break above resistance (red). The wave 2 (green) is invalidated if price breaks above the 100% Fibonacci level. A break below the wave b (brown) bottom could ...
This daily digest focuses on Yuan rates, major Chinese economic data, market sentiment, new developments in China’s foreign exchange policies, changes in financial market regulations, as well as market news typically available only in Chinese-language sources. – The implied volatility for the USD/CNH remains stable despite of record-setting levels. – The electricity used by manufacturing companies increased at a faster pace in October. – Chinese companies excluding banks, securities and insurances attracted 666.3 billion Yuan of foreign investment in January to October. Yuan Rates – The PBOC guided the Yu...
More and more analysts are pointing out the tight correlation between the Japanese yen and the price of gold. Let’s thus investigate the link between these two assets. The chart below shows the long-term relationship between the yellow metal and the USD/JPY exchange rate. At first glance, there is no strong, clear pattern. Surely, gold prices rose in the 1970s and the 2000s, when the U.S. dollar weakened against the yen. But the Japanese currency also strengthened from the mid-1980 to mid-1990, when gold remained in a bear market. Chart 1: The USD/JPY exchange rate (red line, left axis) and the price of gold (yellow line, right axis, Lon...
Technical analysts dominates the daily discussion of stocks. Fundamental concepts change slowly. Chart patterns change constantly. Usually the calls are dramatic, because no one cares about advice that says, “all is well, keep holding.” Traders live on stock charts, but investors also pay close attention. Everyone wants to know whether a stock is breaking down, breaking out, or stuck in a trading range. Here is the key question: How do you spot a good chart? We have several great charts this week. The Stock Exchange provides an expert-level debate on technical and fundamental analysis. (Important background is available here). Comments, ...
Previous: On Thursday the euro/dollar fell from a session minimum of 1.0746 to 1.0620. The fall was 126 points and stopped near the 112th degree. The dollar rose after the release of strong data from the US and Yellen speaking before congress. The Fed chief said that the US economy is now showing persistent success and a tightening of monetary policy could be viable. Her announcement increased further the likelihood that the Fed will increase the interest rate at their December meeting. Additional pressure on the euro came from the sales of American and European bonds. Market expectations: In Asia the euro dropped to 1.0582. The price bounce...
WTI Crude Oil The WTI Crude Oil market try to rally initially during the day on Thursday but found enough selling pressure above to turn the market back around and form a shooting star. The shooting star of course is a negative sign, and the fact that we formed one on Wednesday also tells me that this is a market that is going to continue to struggle overall. Because of this, I feel that the market is going to roll over and perhaps trying to reach towards the $43 support level again. I believe a break down below the bottom of the candlestick for the session on Thursday is reason enough to get short. The oversupply of the market continues to b...
There is a total misunderstanding of the role of gold and why it is so critical to own physical gold. Gold should not be bought or sold based on rumours or events. In connection with the US election, gold moved for totally the wrong reasons. The whole Western world had forecast a Clinton victory. The Western media, which does no analysis but only reports what they are fed, spent no time trying to understand what the mood of the people was. It was exactly the same with Brexit. The elite in London, New York and the big metropolitan areas has totally different objectives to ordinary people. Change in public mood The trend change in public reacti...
Copper:Initial Surge On Trump Election Suffers Correction Following an impressive rally over the last couple of weeks, Copper prices sustained a correction lower this week as a rampant US Dollar weighed on the commodity complex. Prices initially responded positively to news of Trump’s election as markets speculated on an increase in commodity demand aligned to Trump’s proposals for a huge increase in infrastructure expenditure to begin next year estimated at around $500bln. Better data out of China and signals of improved demand have also leant support to the red metal. However, the surge in prices has now lost some momentum as analysts c...
Animals seem to make even the most mundane topics far more interesting, and I certainly feel like that’s the case with the stock market. You often hear the terms bull and bear thrown around on TV all the time, but do you really know what each means? A while back I discussed what constitutes a bear market, so today I decided to talk about the much more fun and happy, bull market. What Exactly is a “Bull Market”? This occurs when a financial market, index, or group of securities, demonstrate that prices are rising or are expected to rise in the near-term (or long-term). While it is generally used to describe the stock market, it ca...