As the S&P and NASDAQ makes new highs, there seems to be less exuberance in the more risk-on small caps. As seen below, the Russell 2000 Index has been mostly trading sideways for 2 months now. There is a significant divergence that has taken place between the large-caps and small-caps, as indicated in the following: … Continue reading Convergence play?
As the Dollar Currency Index approaches upper resistance in the $97.50 region, Gold looks attractive for a quick play. Everyone and their dog knows that Gold and the US Dollar (DXY) typically trade inversely, Dollar up > Gold down. Although this correlation has been breaking down in recent months; no doubt a weak Dollar provides … Continue reading Short term play on GOLD
The Dollar breaks out against Euro as ECB flips On Thursday the ECB flipped. After Powell lead the way in January it was about time for Mario to follow suit. After announcing a few dovish policy decisions and most notably that rates would remain unchanged until the end of 2019, the Euro sank to levels … Continue reading Dollar Euro Gold
On Friday the S&P500 closed within ~10 points of the previous week, marking little action as the index pressed up against the 2,800 resistance. Treasuries sold off slightly with the 10 Y hitting 2.759%. Treasury spread on the 5-30 hit its highest in more than a year at 58 basis points. Gold ended a bullish … Continue reading The Week Ahead
After the "worst December since the Great Depression" equities have recovered from their extremely oversold levels. The S&P500 posted a ~ 8% gain during the month of January. Since December 24 SPX has rallied almost 20% from 2350 back to 2800, with only 11 of the last 40 sessions closing lower than they opened. 2800-2817 … Continue reading Sell the News?
The January 30th FOMC press conference was greatly anticipated by market participants, generally looking to see how dovish Powell could get in the light of uncertain financial conditions and signs of a global slowdown. This is a recap of last meeting: Language: Powell starts off his conference indicating that the "economy is in a good … Continue reading The Powell Put in Action
SPX Topping; a new lower high This week has been less exciting for equities as the major indices have failed to rally above last Fridays highs. As we look at the S&P 500 its easy to see that overhead resistance is becoming a large contributor to the days price action. Lets remember that in high … Continue reading SPX top, Treasuries and Dollar Rally subdue GOLD
The MSCI Emerging Markets ETF has surprisingly under-performed the S&P 500 in this recent risk rally. Take a look at $SPX: nearly 14% since Dec 24th! Meanwhile $EEM has returned ~9% during the same time period Probably telling about the true nature of this surge in risk assets. Participants are highly emotional and uncertain during … Continue reading $EEM has under-performed $SPX
Christmas eve posted a -2.06% day on the S&P500, when markets opened again on the 26th we closed up 4.43% (more than 100 S&P points). The DOW posted up 4.67% (+1,020 DOW points). Is this how we bottom? I don't think so. Since the Dec 26th intraday bottom of 2346 on the S&P, we … Continue reading The Ultimate Short Setup?
$TWTR bounced again off $26-27 reaffirming support. Looking at resistance in $34-36 range.