Latest Posts
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Finance 0
A Simple Relationship Between Gold, T-Bonds And The US$
A TSI subscriber recently reminded me of an indicator that I regularly cited in ‘the old days’ but haven’t mentioned over the past few years. The indicator is the bond/dollar ratio (the T-Bond price divided by the Dollar Index). The bond/dollar ratio not only does a reasonable job of explaining trends in the US$ gold price, it does a much better job of explaining trends in the US$ gold price than does the Dollar Index in isolation. As evidence, here is a chart comparing the bond/dollar ratio (USB/USD) with the gold price followed by a chart comparing the reciprocal of the Dollar Index with the gold price. The first chart indicates a clo... -
Finance 0
Short-term Trading Idea: USD/CHF – Bull Speculation: After A Double Bottom Possible Break In Trend
Trading opportunities for currency pair: the USD/CHF has crept up close to a strong resistance. A break at 0.98 is expected and then a strengthening of the USD against the franc to 0.9940. Look to buy dollar only after a break in the level and a consolidation above 0.98 that doesn’t last long. The last Swiss franc idea I made was published on 25th May, 2015. When the idea was published, the dollar was trading at around 0.9433. According to the double bottom price model and a break in the trend line, I expected to see a weakening of the franc to 0.9626 and, with the rate passing 0.9626, to 0.9860. The buyers weren’t able to break the tr... -
Finance 0
EU Bullet Report – Gold And Oil On The Move
Today’s calendar is very light with only US PMI standing out this afternoon, which is expected to decline to 7 from 9.6 in April. Over the weekend, Chinese data came out weaker than expected however reactions were not very negative. The new string of bad data reveals though that China’s assumed recovery is still fragile. Stocks: Despite very strong retail sales on Friday, US stocks closed the day lower. Asian stocks however are trading marginally higher, led by Nikkei, despite Soft Chinese data over the weekend. Indicators released on Saturday showed China’s investment, factory output and retail sales all grew more slowly than expected... -
Finance 0
EU Bullet Report – Gold And Oil On The Move
Today’s calendar is very light with only US PMI standing out this afternoon, which is expected to decline to 7 from 9.6 in April. Over the weekend, Chinese data came out weaker than expected however reactions were not very negative. The new string of bad data reveals though that China’s assumed recovery is still fragile. Stocks: Despite very strong retail sales on Friday, US stocks closed the day lower. Asian stocks however are trading marginally higher, led by Nikkei, despite Soft Chinese data over the weekend. Indicators released on Saturday showed China’s investment, factory output and retail sales all grew more slowly than expected... -
Finance 0
Top 4 Assets To Watch This Week – 5/16/2016
The US Economy Shows Surprising Trends The US Treasury yield curve evened out on Friday 13th March 2016 to a level not seen since March 2016. The spread between the 10-Year US Treasury note and the 2-Year US Treasury note has flattened out in recent days indicating that the costs between long-term and short-term borrowing costs are declining. The closing of the gap between the Treasury notes reached a low of 94.9 points – a level not seen since March 8, 2016. While this is certainly a situation to be concerned about, it pales in comparison to a situation where there is an inversion of the yield curve. In that case, the Federal Reserve Ba... -
Finance 0
Commodities: Last Week’s Asset-Class Leader
Broadly defined commodities bounced higher last week, topping the performance list for the major asset classes, based on a set of proxy ETFs. iPath Bloomberg Commodity (DFP) increased 1.4% for the five trading days through May 13, delivering a relatively outsized gain vs. the rest of the field. DJP’s latest weekly gain, the third rise over the past four weeks, stands out amid the renewed weakness in global equities. Dividing the world’s stock markets into US, foreign-developed and emerging-market buckets shows declines across the board last week. The biggest loser, however, is foreign “junk” bonds via iShares International High Yiel... -
Finance 0
“Winter Is Coming” (to Winterfell, Certainly, To The Market, More And More Likely)
I predict that Game of Thrones, adapted from the books in the series A Song of Ice and Fire by George R.R. Martin, will most certainly outlive the current bull. Having been told repeatedly by scores of analysts that “winter is coming” to this particular market and that the White Walkers will surely destroy the market, we can be forgiven if we have tired of their bearish chatter. So like most residents of the lands south of The Wall, many investors have decided White Walkers (and bear markets) are only myth and we should go on about our business of seeking wealth and the power wealth brings. (Game of Thrones haters, you may read... -
Finance 0
E Elliott Wave Analysis: Bulls Taking Over Wave Five
USD/CHF has been in a big pullback since end of 2015 and is in a corrective and temporary decline. Notice that falling price action is overlapping which is evidence of a contra-trend movement so we suspect that downtrend is limited, especially after we identified an ending diagonal in wave C-circled, final leg of a big wave IV that is showing evidence of a low in place following recent bounce from 0.9440 area. Ideally market is now at early stages of a new bullish cycle; three waves up for wave V. USD/CHF, Daily... -
Finance 0
AUD/USD Dives Deeper On Chinese Data
The Australian dollar has completed a drop of over 600 pips from the highs around resistance at 0.7840, opening the new trading week with a Sunday gap to 0.7244. While the pair managed to recover relatively quickly, there are reasons for weakness in the A$ in addition to the RBA’s one-two punch. China, Australia’s No. 1 trade partner, releases a big bulk of data over the weekend, and it was all red on the economic calendar. Industrial output advanced by 6% y/y, worse than 6.8% seen last time and 6.5% expected. This is the most critical figure for the Australian dollar as it is best correlated with the Australian metals that China consum... -
Finance 0
Dovish FOMC Meeting Minutes And Inflation To Keep Dollar Subdued
A slow start to the week will see the pace pick up steam as the markets prepare for Tuesday’s inflation data followed by Wednesday’s FOMC meeting minutes from the April Fed meeting. The US dollar closed Friday on a strong note following the release of the retail sales data. After the release which showed US retail sales rising at the fastest pace in a year at 0.80% excluding autos, the dollar slipped in late Friday trading but still managed to close in the positive. The better than expected retail sales numbers prompted the Atlanta Fed’s GDPNow model to forecast Q2 US GDP at 2.80%. Meanwhile, the NY Fed’s Nowcast saw a more modest inc...
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