Hello traders everywhere. After what felt like a small positive victory on Friday has quickly subsided after we woke up this morning to news of growing global tensions with Saudi Arabia and yet another sell-off in the tech sector, a falling dollar, and treasuries.
The dollar is trading near a two-week low against its peers after U.S. retail sales disappointed in September. West Texas crude oil traded around $71 a barrel, less than a dollar away from issuing a red weekly Trade Triangle, amid tensions between Saudi Arabia and the U.S. over the disappearance of a prominent journalist and gold is headed toward its fourth advance in five days.
The DOW was in positive territory for most of the morning trading above its 200-day moving average, the only index to do so, but has slipped into negative territory this afternoon. Both the S&P 500 and NASDAQ are both trading below their 200-day moving average after opening the week in negative territory. While the NASDAQ has already triggered a new red monthly Trade Triangle the S&P 500 is holding on at the moment, but that could change if it continues to trade below the 200-day Moving Average. Continue reading "Global Tensions Add Stress To Tense Stock Market"
We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.
Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.
Silver futures in the December contract is currently trading at 14.64 unchanged for the trading week continuing its low volatility as prices have been stuck in the mud over the last month or so. I have been recommending a bullish position from around the 14.50 level & if you took the trade continue to place to stop loss under the contract low which was hit on September 11th at 13.96 an ounce. Gold futures hit a two month high in this week's trade as the U.S stock market was sharply lower as funds came out of equities and into the gold market as a flight to quality as gold is used as a safe haven as that has helped support silver prices here in the short term. Silver futures are trading above their 20 day, but still under their 100 day moving average which stands at 15.47 and for the bullish momentum to continue we have to break the 15.00 level in my opinion as I think that could happen in next week's trade so stay long and continue to place the proper stop loss. I think the volatility will come back into this market as historically speaking silver is very volatile, but that has not been the case in 2018 as I still think prices look very cheap especially compared to gold and crude oil as they are all inflationary commodities.
TREND: HIGHER - MIXED
CHART STRUCTURE: SOLID
Continue reading "Weekly Futures Recap With Mike Seery"
Underperforming Despite Tailwinds
The financial cohort has conspicuously underperformed the broader market for the majority of 2018. The group didn’t participate in the broader market performance in Q3 where the S&P 500 had its best quarter since 2013. Banks have had domestic and global economic expansion tailwinds at its back while posting accelerating revenue growth, increasing dividend payouts, engaging in a record number of share buybacks and benefiting from tax reform. Augmenting this economic backdrop is a record number of IPOs, a record number of global merger and acquisitions, rising interest rates, deregulation, and tax reform. Banks are benefiting in unique ways due to the consulting fees regarding mergers and acquisitions and trading around market volatility. All of these elements provide an ideal confluence that bodes well for the financial sector. JP Morgan (JPM), Citi (C), Wells Fargo (WFC), Goldman Sachs (GS) and Bank of America (BAC) seemed to be poised to continue to benefit from the favorable economic backdrop. Thus far in 2018 the financials have performed terribly considering the broader market performance and the aforementioned economic tailwinds. There’s negative sentiment that’s placed the financials in a holding pattern for much of 2018 over concerns of rapid interest rate increases and an inverted yield curve.
The Federal Reserve, Rising Interest Rates and Economic Strength
The Federal Reserve expects the economy to continue to strengthen and inflation to rise shortly. The economic strength coupled with the threat of inflation provides an environment that’s ripe for rising interest rates. The Federal Reserve has been very bullish on the domestic front and signaled that rate hikes will continue and may even accelerate its pace of rate hikes contingent on inflation and economic strength. There’s no question that the financials benefit from rising interest rates, and Bank of America(BAC) has one of the largest deposit bases among all banks and serves as a pure play on rising interest rates. Goldman Sachs (GS) has even branched out into consumer banking with its Marcus product so needless to say all big banks will benefit from their deposit bases.
Federal Reserve Chairman Jerome Powell stated that the unemployment rate currently stands at 3.9%, near a 50-year low while core inflation is right around 2%. Powell said that these two metrics are part of a “very good” economy that boasts “a remarkably positive outlook” from forecasters. The central bank approved a quarter point hike rate in the funds rate that now stands at 2.25%, and the committee indicated that another rate hike would happen before the end of the year. 2019 will likely see three more rate hikes and 2020 will see one rate hike before pausing to assess the delicate balance of rising rates in the midst of a strong economy while taming inflation. Continue reading "Financials – Conspicuously Underperforming"
Hello traders everywhere. We were due for a rebound off the lows this week, and that's just what we got on Friday at the open with the stock market posting gains over 1% at the highs across the board with technology and other high-growth stocks leading a fight back. While today's gains are an excellent way to end the week if they hold, we need to remember that overall all three indexes are still down over 4%, that marks the third biggest weekly loss this year.
The NASDAQ lost over 4.8% on the week and issuing a new red monthly Trade Triangle at 7,443.10 signaling a possible long-term short position, but surprisingly it hasn't lost the most this week. That honor belongs to the DOW which stands to lose over 5%, issuing a red weekly Trade Triangle signaling a move to the sidelines. There is still quite a bot of room to go before a red monthly Trade Triangle would appear. The S&P 500 is down 4.9%, and much like the DOW issued a new red weekly Trade Triangle signaling a move to the sidelines. Continue reading "Stocks Fight Back After Two Day Slump"
A unique setup has occurred in the Invesco DB US Dollar Index (UUP) that resembles an Engulfing Bearish type of pattern (even though it is not technically an Engulfing Bearish pattern). Technically, an Engulfing Bearish pattern should consist of a green candle followed by a larger red candle whereas the red candle’s body (the open to close range) completely engulfs the previous candle’s body. In the instance, we are highlighting in this article, a unique variation of what we’ll call a “Completely Filled Engulfing Bearish” pattern is setting up.
This is when two red candles set up in an Engulfing Bearish type of formation – omitting the requirement that the first candle is green. Japanese Candlesticks help us to identify the psychology of the market price in relation to our other specialized tools. We believe this formation is important because both of the red candlesticks that make up this pattern opened much higher than the previous bar’s close and dramatically sold off into the close of each session. We believe this type of rotation clearly illustrated that price is reaching resistance near $25.50 and pushing lower because of this strong resistance. We also believe this resistance/pattern will set up a downside price move in the US Dollar very soon.
Below, we have highlighted the traditional formation of an Engulfing Bearish Candlestick pattern. The example chart, to the right of this definition, shows another variation of the Engulfing Bearish pattern setting up after three minor sideways candles. The interpretation of this Bearish Reversal pattern is subjective in terms of understanding the psychological representation of the Engulfing Bearish pattern. This pattern represents a total reversal of power within the price bar where the buyers were in control at the open (resulting in a higher opening price) and lost control through the trading session to allow the sellers to drive the price much lower into the close of the trading session. Thus, the Engulfing Bearish pattern represents a “key pivot point” in price that may prompt a larger downside move in the near future. Continue reading "Bearish Pattern Warns Of Dollar Weakness"