Hello MarketClub members everywhere. The Dollar has rallied while U.S. stocks have fluctuated this morning. The reason for the jump is retail sales; retail purchase jumped in April to the highest levels in a year. This indicates that consumer spending could help the U.S. economy recover from its early-year slowdown and possibly give the Fed a reason to raise rates next month.
Purchases climbed 1.3 percent last month, beating the economists estimates of a 0.8 percent gain. It's the biggest gain since March 2015 and comes after a 0.3 percent March drop that was smaller than previously reported, Commerce Department figures showed Friday in Washington. Continue reading "Dollar Jumps After Retail Sales Report" →
The US consumer is under pressure. Consumer Confidence level fell to 89 in April, and retail sales fell by -0.3 MoM in March. And as if that weren’t enough, GDP growth missed the mark for a second consecutive quarter, with Q1 growth falling to as low as 0.5% annualized, well below expectations.
Naturally, those developments are not bringing a Fed rate hike any closer, and it leaves the Dollar widely exposed to short selling. It’s the catch-up game, where Dollar peers such as the Euro, Yen, and Aussie are gaining lost ground. The relative advantage of the US economy is narrowing, and the prospect of a tightening cycle from the Fed seems even more remote.
This isn’t the first time the Dollar has been hit by the catch-up game. Here’s how the game plays out: The Dollar turns weaker, shaving its value by several percentage points only to come back stronger in the end as the US economy regains momentum. That’s why one should tread lightly before pouncing on a Dollar short. After a series of disappointments, the chances of an upward surprise in US data is much greater. There’s a very real chance that shorting the Dollar at this stage, after a 6.5% correction, will be too late. Continue reading "Too Late To Short The Dollar?" →
Less than two weeks into 2016 and history has already been made. This January will go down in the record books as Wall Street’s worst in decades. China is losing control, the Middle East is boiling over and the Emerging Markets are in dire straits. All of which has led stocks to shed more than a trillion dollars in value.
It’s the classic boiling-to-the-brim pot which suggests we’re ready to push the dollar higher, right? Instead, dollar strength has really been rather tame which, on the face of it, is quite puzzling. That is unless investors have secretly been turning bearish on the greenback. The question is, are they? Continue reading "Are Investors Secretly Turning Bearish On The Dollar?" →
The big news of this past week has to be the Swiss National Bank (SNB) parting ways with the euro. Make no mistake about it, this was a game changer and the ramifications of SNB's actions will be felt for a long time to come.
The next big game changer will be Greece exiting out of the Euro and going back to its old currency the Greek drachma. It may not happen next week, or next month, but it will happen.
On to the markets - it has been quite a week for the indices, with the DOW, S&P 500 and NASDAQ all down over 2%. The strong downtrend in crude oil was unabated, with crude closing down the week with a loss of 3%. The only two positives of the week, are the dollar index, which closed the week with a gain of 0.7% and gold which climbed to its best levels in over four months with a gain of 3.16% for the week. Continue reading "The Next Bombshell To Hit The Markets ... Greece" →
There's a war going on right now and I don't mean overseas, I mean right here in the markets. Last week was a perfect example as the intraday swings of the S&P500 clocked in at a staggering 6.5%. Market volatility often is a precursor of things to come, and the irony of all this action was that the market closed with a loss of -0.65% for the week.
The net weekly change for the DOW was -0.53% and there was an even smaller loss of -0.42% for the NASDAQ. All three indices formed an important Japanese candlestick pattern, a weekly doji candle. Why is this important? A doji candlestick often signals indecision in the market. When the doji forms in an uptrend or downtrend, this is normally seen as significant, as it is a signal that the buyers are losing conviction when formed in an uptrend and a signal that sellers are losing conviction if seen in a downtrend.
What To Watch For This Week
A lower weekly close would indicate to me that the buyers are beginning lose control of this aging bull market. Here is the "line in the sand" for each of the indices that I am watching. Once below this line, watch for heavy liquidation to come in across the board.
Gold Is Now Officially On The Move
You might remember on January 7th, I wrote a post on gold (FOREX:XAUUSDO) and the key neckline level. The key neckline in gold was broken to the upside last Friday when gold closed out the week with a very positive 2.9% gain. I now have a confirmed upside target zone of $1,340, which equates to about $132-$134 on the ETF, GLD. To follow all of the entry and exit points for gold, check in daily with the World Cup Portfolio. Continue reading "Last Week's Volatility Could Be A Harbinger Of Things To Come" →