By Alhambra Investment Partners
In its 84th Annual Report released last June, the Bank for International Settlements departed from usual central bankish conventions and decried the growing departure from market discipline and even reality. The BIS even used the loaded term “euphoric” to describe what it saw as risk market prices no longer affected by fundamental economic conditions. As the Financial Times noted then,
The BIS, the bank for central banks, has been a longstanding skeptic about the benefits of ultra-stimulative monetary and fiscal policies and its latest intervention reflects mounting concern that the rebound in capital markets and real estate is built on fragile foundations.
Continue reading Not My Euphoria
By Chris Ciovacco
Transportation Average – A Big Concern For Stock Bulls?
Weakness In Transports In 2015
If you follow the markets, you have probably heard about the “non-confirmation” warning being flashed by the fact the Dow Transportation Average has failed to post a new high simultaneously with the Dow Jones Industrial Average.
Dow Theory Is Useful
We have written about Dow Theory many times in the past; a July 2014 article explains the economic rationale behind the theory. We believe Dow Theory is useful, but it is one of many sources of information.
Continue reading Transports – Big Concern?
By Tom McCellan
Eurodollar COT’s Leading Indication
May 08, 2015
The second half of 2015 could be a problematic time for the US stock market, if this week’s chart is correct. I introduced this relationship to Chart In Focus readers back in 2011, and it has been a regular feature in our twice monthly McClellan Market Report and our Daily Edition since 2010.
The basic idea is that I take data from the weekly Commitment of Traders (COT) Report on the commercial traders’ net position in eurodollar futures, and then use that as a leading indication for the SP500. In this case, the term “eurodollar” (ED) refers not to a currency relationship, but rather to dollar-denominated time deposits in European banks. So it is an interest rate futures product.
Continue reading Eurodollar CoT Indication
The China short (via the leveraged YANG) is now covered (ref. May 5 post) not because I think it is not going to go up more, but because I am a chicken. I have never claimed to be anything other than a cash valuing risk manager. The heroic shorting is for others until I can get new longer-term trends. China’s trend, along with the US and others, is still up. Not talking about secular trends, but rather intermediate ones, defined here as multi-month.
In reviewing the chart of FXI, I see something similar to the European Euro hedged ETF and several other items (incl. a favored Japanese machine tool and robotics manufacturer that NFTRH subscribers know about) that may make good cases for re-buying, not shorting, eventually. There is some of this going on in US stocks as well. Think healthcare/biotech.
I don’t think the corrections are over with, but I am not ready to become a bear because I don’t see an intermediate term reason to yet. So it’s swing trading and cash defaulting for this chicken until trends change.
Back on the China 25 ETF above, it is not over sold yet but down the road, pending the view on the broad global markets, I am watching the area from which we charted the breakout in NFTRH. That would be around 42-44.
Every time the market twitches the wrong way MarketWatch puts up bearish headlines. The author of this article, Michael Sincere has been the most prolific…
He takes us by the hand and guides us through the particulars of the different kinds of bear markets. This kind of stuff has gone hand in hand with the bull market, which just eats it for breakfast. Still, there is one bearish thing here and that is the comments from readers.
Here are the most recent. One component that needs to be in place for a bear market is for people to have long-since tuned out the perma-bears, and instead to be mocking them.