Author: The INO.com Team

Hello traders everywhere. There was no doubt that the market would bounce back today after a losing day on Tuesday, after all, that's the cycle we've been in for a while now. But more importantly, it's the trading range that we're currently stuck in. Not familiar with the term "trading range?"

A trading range occurs when a security trades between consistent high and low prices for a period of time. The top of a security's trading range often provides price resistance, while the bottom of the trading range typically offers price support. In this case, we will be looking at the 50-day and 200-day moving averages. With that definition mind, let's take a look at the major indexes.

All three major indexes, the S&P 500, DOW and NASDAQ, are all stuck in a trading range between the 50-day and 200-day moving averages. This range began almost exactly one month ago on August 5th, where we saw all three indexes lose roughly -3%. The NASDAQ led the way with a daily loss of -3.4% with the S&P 500 and DOW close behind with losses of -2.9%. Since then they have failed to break out above their 50-day MA's, the level of resistance, while the 200-day MA is providing a level of support.

Key Levels To Watch This Week:

Continue reading "Trapped In A Trading Range" →

Hello traders everywhere. What a wild month! A trade war, a yield inversion curve and a rate cut by the Fed have led to an extremely volatile month, and while we will finish the last week of August in the green with weekly gains, overall we will finish the month of August in the red, the second losing month of the year. The S&P 500, DOW and NASDAQ will all lose over -1.5% with the NASDAQ leading at a -2.7% loss for the month.

Crude oil and Bitcoin joined in on the losing party by losing -5.48% and -4.9% respectfully on the month. The Dollar Index checks in with a slight gain of +.03% or unchanged for the month as it has found resistance at the $98 level. And that leaves us with the one bright spot, gold, which had a gain of +7.8% on the month trading above $1,550 at one point for the first time in a LONG time. Can gold's move higher continue? Is it a sign of things to come?

Key Levels To Watch Next Week:

Continue reading "Market Set For Second Losing Month Of The Year" →

Hello traders everywhere. Do you find yourself following President Trump closely on Twitter? I sure do and you probably should too. Reason being, recently it seems that we are one tweet away from disaster or prosperity. Take today, for instance, the market overall was barley in the red after Fed Chair Jerome Powell said "The U.S. economy is in a "favorable place" and the Federal Reserve will "act as appropriate" to keep the current economic expansion on track. He then continued to say "the U.S. economy has continued to perform well overall, business investment and manufacturing have weakened, but solid job growth and rising wages have been driving robust consumption and supporting moderate overall growth.”

And Then we get this tweet from President Trump: "As usual, the Fed did NOTHING! It is incredible that they can “speak” without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed. I will work “brilliantly” with both, and the U.S. will do great..."

"....My only question is, who is our bigger enemy, Jay Powell or Chairman Xi"?

After that exchange, he shifted his sights to China they unveiled new tariffs. China stated that they will implement new tariffs on another $75 billion worth of U.S. goods, including autos. The tariffs will range between 5% and 10% and will be implemented in two batches on Sept. 1 and Dec. 15.

He started tweeting: "Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far...." Continue reading "Always One Tweet Away" →

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" →

Hello traders everywhere. Stocks fell sharply on Wednesday giving back all of Tuesday's gains after the U.S. bond market flashed a troubling signal about the U.S. economy. This move ignited fears that a recession may be on the horizon for the U.S. economy.

The DOW was down more than 600 points and is down over -2.3%, meanwhile the S&P 500 slumped -2.3% and the Nasdaq sank -2.5% on the day.

The yield on the benchmark 10-year Treasury note Wednesday broke below the 2-year rate, an odd bond market phenomenon that has been a reliable indicator for economic recessions. Investors, worried about the state of the economy, rushed to long-term safe-haven assets, pushing the yield on the benchmark 30-year Treasury bond to a new record low on Wednesday.

There have been five inversions of the 2-year and 10-year yields since 1978, and all were precursors to a recession, but there is a significant lag, according to data from Credit Suisse. A recession occurred, on average, 22 months after the inversion, Credit Suisse shows. And the S&P 500 enjoyed average returns of 15% 18 months after an inversion before it eventually turns.

The last time this key part of the yield curve inverted was in December 2005, two years before the recession hit.

Key Levels To Watch This Week:

Continue reading "Stocks Tumble On Recession Warning" →