Financial Markets Newsletter

Warning Signals

Another week of higher prices in stocks in one of the more aggressive moves we have seen since the 2009 low. In the chart below you can see the S&P 500 approaching a long-term trend line which should act as resistance. Also, the yellow arrows highlight the slope of this advance which is the most […]

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Signs of Divergence

The stock market pushed higher into new all-time highs this week but there are technical indicators warning this uptrend is on borrowed time. For one, the sentiment indicators are reading all-time highs in optimism. One of these sentiment indicators, the CNN Fear & Greed Indicator, has been reading “Extreme Greed” for several sessions. These indicators […]

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WAR!

You may have read about the Iranian attack on Friday morning that caused stocks to fall and oil to rise. But the real battle has been between 10YR Treasury bond yields and the S&P 500. In the chart below, you normally want to see the two trend together – as stocks rise, so do interest […]

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December Melt-Up

I hope everyone is having a good holiday season as the S&P continues to push higher into the end of 2019. The best reason I can identify the cause is the chart below. Currently, the Fed is increasing the size of its balance sheet to keep the overnight lending markets liquid for the banks, however, […]

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Overbought Condition

The seasonal price patterns are positive for the next two weeks (Santa Claus rally) but the stock market has achieved an overbought condition as we closed out this week. On the weekly chart below (each bar is one week), I have yellow vertical lines showing overbought conditions according to the relative strength index (RSI) on […]

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Cautiously Elated

We are starting to get the answers we wanted over the last two years. BREXIT is going to happen with the recent elections in the U.K. and the trade war with China is in a place where the market can feel better that there will be no further escalation. This brings greater certainty to the […]

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The Roaring Twenties?

What is the set-up going into the next decade? That all depends on how trade flows balance out with emerging economies like India and China. These two countries have massive consumer bases and getting our trade policies right may preserve our manufacturing base, protect intellectual property and re-balance wages across the globe. Remember, the guidelines […]

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Break-Out or Fake-Out?

The stock markets have edged higher since early October and now are making new all-time highs. Economic data could look better but the good news is that the deterioration that we saw over the summer is abating. Trade negotiations with China are in flux but both sides are indicating signs of an agreement so there […]

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Duty Free or Bust

The S&P 500 moved up slightly this week (0.38%) but mostly consolidated after breaking a major resistance line in the chart below (yellow line). The market is focused on any news regarding a trade deal with China as trade uncertainty has caused CEOs to re-think international supply chains and how they do business which threw […]

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