Weekly Futures Recap With Mike Seery

S&P 500 Futures

The S&P 500 in the September contract settled last Friday in Chicago at 2919 while currently trading at 2875 down about 45 points for the trading week experiencing incredibly high volatility as that situation is going to become more violent in the coming months.

I'm not involved, and I'm advising clients to avoid this market as it is like flipping a coin daily with no trend insight as there are better markets with a lot less risk at the current time.

The S&P 500 is trading below its 20 and 100-day moving average as the trend is to the downside as August historically speaking and be very shaky and that is precisely what's occurring. I will wait for the chart structure to improve, which could take several more weeks.

Bond markets across the world are spooking the equity market as there are now 12 countries with a negative interest rate as the 10-year note which I do have a bullish recommendation which is currently yielding 1.50% and looks to go much lower in my opinion. However, eventually, this will be bullish stock prices, but at the current time, the bond market might be telling you that a recession is around the bend.

I am bearish most of the commodity markets except for the precious metals as weak demand continues to hamper prices.

TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Continue reading "Weekly Futures Recap With Mike Seery"

When The Bond Bubble Blows Up

Amazing isn’t it? It was only back in H2 2018 when everybody but you (because you are as smart as I think you are or because you read NFTRH or nftrh.com) and I was unbelievably bearish about the TREASURY BOND BEAR MARKET!!!

Today… not so much. The herd is absolutely pile driving bonds right now.

tlt bond

I know this all too well because while my SHY (cash equiv.) position is doing well it’s not anything like the above, and is basically – given relative position sizes – offsetting a position in this, which I am still holding with all the stubbornness of a pissed off contrarian. Continue reading "When The Bond Bubble Blows Up"

Stocks Still On Pace For Weekly Losses

Hello traders everywhere. Despite the fact that all three major indexes are up over +1% in Friday trading they will still all lose close to or more than -1% on the week, unable to shake the heavy losses suffered mid-week. The NASDAQ is down -.8%, meanwhile the S&P 500 will lose -1% and the DOW will post we weekly loss of -1.6%.

Falling bond yields are to blame for the volatile markets this week with The U.S. 30-year Treasury yield dropping to a record low Thursday, while the yield on the benchmark 10-year notes dipped to a three-year low as investors sought out safe-haven assets.

Amid all of the volatility, the U.S. Dollar shook off a weekly loss of -1% last week to post a weekly gain of +1.1% gaining strength against global currencies. However, it's still stuck in a tight trading range between $96-$98.

Gold has been the big benefactor of the recent volatility gaining +1% on the week marking three straight weeks of gains against the major indexes posting three straight weeks of losses. That paints a pretty clear picture of a flight to safety by investors. Check out INO Contributor Aibek Burabayev's recent article on gold and where it's headed.

Crude oil is set to post a weekly gain of +.8% after posting four straight weeks of losses, but overall the long-term trend is down for oil and we should expect to see the price oil head lower as we close out the year.

After two weeks of gains, Bitcoin has given back some of this gains losing -7.5% on the week. It's currently stuck in a tight trading range between $9k and $12K, essentially in a sidelines mode.

Key Levels To Watch Next Week:

Continue reading "Stocks Still On Pace For Weekly Losses"

Mixed Signals

In a classic case of the tail wagging the dog, the bond market is signaling that the U.S. economy is headed for a recession, rather than the economy telling the bond market that news, which it doesn’t appear to be doing.

On Wednesday, yields on the benchmark 10-year Treasury note fell below two-year yields for the first time since 2007. “This kind of inversion between short and long-term yields is viewed by many as a strong signal that a recession is likely in the future,” according to the Wall Street Journal. Except, of course, when it doesn’t, and this just may be one of those times. The economy, albeit weaker than it was late last year and earlier this year, doesn’t seem to be close to a recession.

Actually, Treasury yields have been inverted for a while, depending on which spread you look at it. At the same time, yields along the curve have dropped sharply in recent weeks, with some securities dropping to record lows.

For example, on Thursday, the yield on the 30-year bond dropped below 2.0% for the first time ever. That’s down from 3.45% on Halloween. The 10-year yield plunged below 1.60%, down from 3.16% last October 1 and it's lowest level since it hit 1.46% three years ago in July.

Meanwhile, the price of gold has jumped 18% since May to more than $1520 an ounce, its highest level in more than six years. And of course, stocks are down, with the S&P 500 off more than 6% since hitting a record high just a couple of weeks ago.

Why is the market so panicky? Continue reading "Mixed Signals"

World Oil Supply And Price Outlook, August 2019

The Energy Information Administration released its Short-Term Energy Outlook for August, and it shows that OECD oil inventories likely bottomed last June 2018 at 2.805 billion barrels. It estimated stocks dropped 16 million barrels in July to 2.887 billion, 61 million barrels higher than a year ago.

However, for the balance of 2019, OECD inventories are projected to rise, on balance. The third quarter seasonal stock draw is over. At year-end, EIA projects 2019 to be at 2.901 million barrels, 40 million more than at the end of 2018. For 2020, EIA projects that stocks will build 58 million barrels to end the year at 2.959 billion.

Oil

The EIA has revised its estimates for future OPEC production down significantly, given the sanctions on both Iran and Venezuela. For much of the balance of 2019 and 2020, it expects OPEC production to remain under 30 million barrels per day. July was reported at 29.61 mmbd. Continue reading "World Oil Supply And Price Outlook, August 2019"