Equity version of a ‘credit spread’ indicates risk still ‘ON’
That is not to say you should buy Europe right now, as the previous post made clear. But in looking at some charts I found Euro unhedged Spain to be in a bullish pattern vs. Euro unhedged Germany. So comparing apples to apples (not that I would buy anything Euro unhedged any time soon) it appears that risk is still ‘ON’ over there. Look… that’s a cute little pattern targeting the SMA 200 or so.
To de-complicate things, let’s also check out IBEX vs. DAX…
After a correction Europe will be interesting again.
The market is punishing stock market momentum traders left and right. The ones that momo’d the trend late, which by definition is most of them. Biotech, Small Caps and across the pond, the Euro markets are getting dinged for jumping on a story and pushing it too far. Europe markets hit NFTRH‘s targets (ex. EURO STOXX 50 to 3800) and over threw them a bit before keeling over.
Here’s the Wisdom Tree Euro hedged European stock market ETF. For me, HEDJ is of interest again down the road a bit (we were on it before the momo’s in Q4 2014). First it must finish correcting and the Euro bounce must fail.
Not so coincidentally the unhedged EZU is okay. We had noted that the Euro hedged trade was over but that maybe Euro unhedged might be okay. Well, if the Euro tops out the two could reverse roles again.
By Tom McClellan
Obama’s 2nd Term Much Like 1st for Stock Market
April 30, 2015
We are now in the second term of President Obama’s term in office. While the Presidential Cycle Pattern shows similarities among all presidential terms in the stock market’s behavior, it is poorly appreciated how the 2nd term is often different from the first in its character.
Continue reading Obama’s 2nd Term…
By Michael Ashton
I am not one of those people who believe that if the Fed is dramatically easing, you simply must own equities. I must admit, charts like the one below (source: Bloomberg), showing the S&P versus the monetary base, seem awfully persuasive.
Continue reading If Liquidity is Your Sword, Keep Swinging
By Elliott Wave International
Biotech stocks: A real-life example of Elliott-wave forecasting at several degrees of trend
Since joining Elliott Wave International in 1993, the editor of our Trader’s Classroom, Jeffrey Kennedy, has traveled to at least a dozen countries, teaching seminars to some of the best professional and individual traders.
Through April 28, you have a free chance to learn Jeffrey’s trading “tips and tricks” during our free Trader Education Week, an event for traders who want to improve. Every day through April 28, we are releasing Jeffrey’s training videos, full of valuable insights.
Here’s a clip from one of the video lessons now available, where Jeffrey looks at charts of a biotech stock to show you how to use Elliott wave analysis on several degrees of trend. Enjoy!
You will learn:
- Basics of Elliott wave trading
- How to find price targets using Fibonacci
- 4 steps to find high-confidence trades
- And much more
Register now for this free event and instantly watch 7 free trading videos already released (with more on the way).
Register Now >>
This article was syndicated by Elliott Wave International and was originally published under the headline The Power of Context. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
So, does Biotech break down this time? I did not then and do not now like that bull trap candle that got placed on the chart in March.
Bio has not broken down technically, but it has abdicated leadership to the Internets as we noted in NFTRH 340. Here are a couple charts of that situation…
First BTK vs. NDX continues to abdicate…
Internets vs. NDX has been up trending for all of 2015…
Here is the nominal DJINET…
The point I made in this week’s report is that stock market sectors are doing what commodity components used to do; they are rolling from one momentum-driven speculation to another Uranium→Oil→Copper→Silver style. Healthy? Nah. Is what it is? Yah.
By Alhambra Investment Partners
[biiwii comment: nice theme. market views are the guest’s own, but the theme has been applicable since well before NFTRH used it as the no-brainer concept for managing over stimulated, over managed, over inputed and over b/s’d macro markets]
When logic and proportion have fallen sloppy dead
And the white knight is talking backwards
And the red queen’s off with her head…
Grace Slick, White Rabbit
‘Twas brilling, and the slithy toves
Did gyre and gimble in the wabe:
All mimsy were the borogoves,
And the mome raths ougrabe
Lewis Carrol, Jabberwocky
For those of a certain age there is little mystery as to Grace Slick’s inspiration for White Rabbit. Or at least we don’t think so but then things are not always as we perceive them to be. Alice in Wonderland, the story that is the inspiration for Grace Slick’s composition, can be seen as merely a nonsensical children’s story. Or as a warning about the inevitable loss of one’s innocence. Or as a cautionary tale about the sometimes meaningless and nonsensical puzzles that life presents us and the futility of trying to solve them. So was Grace Slick singing about the psychedelia of the sixties or just longing for the innocence of her childhood or shamelessly pandering to an audience to sell records? With the myth that has grown up around the song, we are unlikely to ever know the truth. As for Jabberwocky, a poem that appears in the sequel to the original Alice story, I don’t have any idea what Carrol was getting at with that bit of whimsy. Sometimes nonsense is just nonsense.
Continue reading Down the Rabbit Hole
By Tom McClellan
Volume Data Have Eased One Concern
April 24, 2015
We focus a lot on the Advance-Decline (A-D) data, which is the basis for the McClellan Oscillator and Summation Index plus other indicators. But we also like to watch what the Up Volume (UV) and Down Volume (DV) numbers are doing.
Continue reading One Concern Eased
I don’t know how literal this is, but by way of SoberLook’s excellent daily email service of macro signposts, here is a look at a street vendor quick-teaching kids how to read trend lines and trade like Buffett. I don’t think Buffett uses trend lines but I do think this is a shoe shine boy moment for the Chinese stock market, to one degree or another.
By Michael Ashton
Surprisingly, markets are treading water here. The dollar, interest rates, and stocks are all oscillating in a narrow range. In some ways, this is surprising. It does not shock me that interest rates are fairly boring right now, with the 10-year yield trading almost exclusively within 25bps of 2% since November. Market participants are divided between those who see the Fed’s cessation of QE as indicative that prices should decline to fair market-clearing levels (that is, higher yields) and those who see weakness economically both domestically and abroad. There is room for confusion here.
I am similarly not terribly shocked that the dollar is consolidating after a long run, especially when part of that run was fueled by the popular delusion that the Federal Reserve had suddenly become extremely hawkish and would preemptively hike rates before convincing signs of inflation arose. I am hard-pressed to think of a time when the Fed pre-emptively did anything, but that was the popular belief in any event. Now that it is becoming clear that a hike in rates in June is about as likely as the possibility that the Easter Bunny will deliver eggs at the same time, dollar traders who were relying on widening interest rate differentials are pausing to take stock of the situation. I will say that it certainly seems plausible to me that the dollar’s rally will continue for at least a little while, due to the volatility coming our way as the Greek drama plays out, but the buck is not an automatic buy either. Money growth in the U.S. continues to outpace money growth in most other economies (see chart, source Bloomberg), although it is a much closer thing these days.
Continue reading Whither (Wither?) Profits