Price Action Headlines

  • Dow Jones Megaphone pattern, bounce of new support

    Below looks at the Dow Jones Industrials Index over the past 100 years on a monthly closing basis- In the early 1980’s the Dow used old resistance to become new support at (1), where a breakout and strong rallied followed. CLICK ON CHART TO ENLARGE The Dow looks to be using old resistance as new support to push higher off of at (2) again. Positive price action off new support at (2) continues. For bulls to get concerning long-term concerning message from this pattern, support would need to be...

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  • Positive Feedback Loops, Financial Instability, & The Blind Spot Of Policymakers

    Authored by Francesco Filia of Fasanara Capital, “Learn how to see. Realize that everything connects to everything else.” – Leonardo da Vinci A Dangerous Market Structure is More Worrying than Expensive Asset Valuations and Record Debt Levels Macro-prudential regulations follow financial crises, rarely do they precede one. Even when evidence is abundant of systemic risks building up, as is today, regulators and policymakers have a marked tendency to turn an institutional blind eye, hoping for...

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  • Bonds, Futures, Global Stocks All Rise, Boosted By "Germany's Brexit Moment"; TSY Curve Collapse Continues

    S&P 500 futures are higher, continuing on yesterday's momentum, after European and Asian shares also rose alongside a rebound in oil, as the year-end performance chase appears to be accelerating. There were several different moving parts in a mixed European session, in which early Euro strength gave way to weakness... ... which in turn pushed the Stoxx 600 and US index futures higher, rising above yesterday's session high on negligible volumes.  Global equity futures rallied with Hang...

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  • "None Of The Problems Are Solved" Despite Global 'Plunge Protection' Overnight

    When many American traders went to bed last night, China was tumbling, the euro was in trouble, and US equity futures were notching lower. Then, as former fund manager Richard Breslow scoffs, it appears the world "reconsidered" and everything rallied to erase any sign of discontent or uncertainty by the time everyone woke up... Via Bloomberg, Apparently, the word of the day is “reconsider.” Across a whole host of assets, we got somewhat violent moves early in the 24-hour trading cycle that...

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  • As Bitcoin Tops $8,200, Only 39% Of Survey Respondents Say It's A Bubble

    Having first surged above $8000 overnight amid Zimbabwe's chaos, it appears uncertainty in the core of Europe has driven further demand for cryptocurrencu protection, sending Bitcoin to a new record high of $8247 - up 50% from the 'Bitcoin Cash' crash weekend lows. image courtesy of CoinTelegraph As CoinTelegraph reports, the latest milestone for Bitcoin, which came following news the first Bitcoin-to-Litecoin Lightning Network ‘atomic swap’ successfully debuted, caps its comeback after Bitcoin...

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  • Inflation and Counterfeit Credit, Report 19 Nov 2017

    Let’s take a look at an often-repeated idea that is popular in the gold and alternative investing communities. The government possesses a printing press. Therefore, it will never default. It will just inflate its way out of the debt. It will devalue the dollar. The government does not set the value of the dollar. And it has no mechanism to set it. So, logically, it has no mechanism to reset it. It cannot devalue it. In the same way, you cannot lower yourself down by your bootstraps since you are...

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  • What German Political Turmoil? Global Markets BTFD, Don't Look Back

    US index futures are unchanged, having recovered virtually all overnight session losses alongside the EURUSD following Merkel's failure to form a government, while European shares rise despite Angela Merkel's failure to form a new government. In the span of just hours, the goalseeked "hot take" consensus was that Germany’s collapsed coalition talks aren’t expected be a deal breaker for European equities due to the "strength of the German economy." As we pointed out earlier, the euro reversed...

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  • Bank Of America: "This Is A Clear Sign Of Irrational Exuberance"

    The latest monthly Fund Manager Survey by Bank of America confirmed what recent market actions have already demonstrated, namely that, as BofA Chief Investment Strategist Michael Hartnett explained, there is a "big market conviction in Goldilocks leading to capitulation into risk assets" while at the same time sending Fund managers' cash levels to a 4-year low, and pushing "risk-taking" to a new all-time high, surpassing both the dot com and the 2007 bubbles. BofA's takeaways from the survey,...

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  • Some Non-Hyperbolic Junk Talk

    Authored by Kevin Muir via The Macro Tourist blog, If you are looking for some breathless post about the recent collapse of the junk and high-yield market over the past couple of weeks, then click somewhere else. I know it makes for exciting writing, but I won’t do it. There is already more than enough hyperbolic rhetoric filling the financial airwaves. But the really amusing part? Have any of these doomdayers actually had a look at the return of these bond markets over the past year? I hate...

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  • "There Are Too Many Warning Signs": Why One Trader Thinks Stocks Are Set To Slide In The Coming Days

    From the latest Macro View edition by Bloomberg macro commentator and former Lehman trader, Mark Cudmore Stock markets look set to continue to slide in the days ahead. There are too many small warning signs building up at a vulnerable time for markets. Just because a 3% correction hasn’t happened for a long time doesn’t mean that one isn’t possible. Quite to the contrary, it suggests there are a lot of complacent longs that may over-react to a pullback. It’s also important to emphasize the...

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  • Nikkei- Topping pattern at a critical price point?

    The Nikkei 225 now finds itself at its “Half Way” point of the 20-year crash, based up 1989 highs and 2009 lows. Could it be creating a topping pattern or major reversal at a critical price point? What this important index does at a key price zone could end up impacting stocks in the states and around the world? Below looks at the chart patterns of the Nikkei 225 over the past 30-years on a monthly basis- CLICK ON CHART TO ENLARGE The chart above highlights that the Nikkei 225 is at its 50%...

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  • The Cycle of Falling Interest, Gold and Silver Report 12 Nov 2017

    Over the past few weeks, we have looked at the effects of falling interest rates: falling discount applied to future cash flows (and hence rising stock and bond prices), and especially falling marginal productivity of debt (MPoD). Falling MPoD means that we get less and less GDP “juice” for each new dollar of borrowing “squeeze”. Last week, we proposed an economic law: if MPoD < 1 then the economy is unsustainable. MPoD has been falling since at least 1950, and is currently well under 0.4...

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  • One Trader Urges "Extreme Caution"

    Something has changed. While stocks are exhibiting their usual BTFD patterns still, other asset classes are not playing along - most notably the junk bond market and the sovereign yield curve. Furthermore, while a few megacaps continue to rise ubiquitously, small caps have suffered and breadth is terrible. As former fund manager Richard Breslow warns, "sometimes markets look really bad and it’s prudent to exhibit extreme caution." Via Bloomberg, Use 2008 as a good example. Other times, they...

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  • Sweet melt up potential here says Joe Friday

    Tis the season for Chocolate (Cocoa) to do well, will it repeat its historical pattern again this year? Below looks at the seasonal pattern of Cocoa from Sentimentrader CLICK ON CHART TO ENLARGE Going into this period of seasonal strength, Cocoa bulls of late are hard to find and dumb money traders have established one of the largest short positions in this commodity in years. The triple combo could make the price action of this commodity very interesting going forward. This commodity can be...

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  • "This Looks More Frightening": Global Stock, Bond Selloff Accelerates Amid Risk-Parity Rumblings

    Yesterday's Japan flash-crash inspired selling continues for a second day, with global equities - and bonds - sliding early Friday on concerns U.S. tax reform - and corporate tax cuts - will be delayed after Senate Republicans unveiled a plan that differed significantly from the House of Representatives’ version. After suffering their biggest plunge in 4 months on Thursday, European stocks failed to find a bid along with Asian stocks, while U.S. index futures pointed to a lower open (ES -0.5%,...

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  • Forget B.T.F.D., It's Time To B.U.T.T.

    Authored by Kevin Muir via The Macro Tourist blog, I haven’t written about it much, but I have long been a closet uranium bull. Yeah, maybe I wrote one piece - Somewhere Cheap to Hide, but it’s not like I have been pounding the table on the idea. Although it has been obvious for everyone to see that the industry could not continue operating with the price of the commodity trading below the cost of production, the problem has been that no one wanted to cut. So even though it was illogical,...

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  • Global Markets Stumble, Spooked By Japanese Stock Fireworks

    The overnight fireworks in Japan, which saw the Nikkei plunge by 860 intraday points and sent vol and volumes soaring (before recovering most losses), spooked traders in Asia and around the globe, and U.S. equity futures are red this morning, along with European shares and oil. As one early riser sellside desk notes, the Nikkei 225 provided the latest example of choppy markets and the 860 point intraday plunge "got us worried.  Is this a warning sign for risk assets?" President Trump's challenge...

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  • Bank Stocks, Dollar Slide Hit By Fresh Tax Reform Doubts

    U.S. equity futures are little changed as European and Asian shares retreated, led by sliding bank stocks and a drop in the dollar as doubts over republican tax cuts and ongoing bond curve flattening hurt sentiment and prompted fresh questions over the viability of the US expansion. Investor concerns also returned to geopolitics as Trump continued his tour of Asia with a mission of rallying the world to stand up to the North Korean threat. Calling out by name Russia and China, he said Wednesday...

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  • Falling Discount, Gold and Silver Get Powelled, Report 29 Oct 2017

    Warren Buffet famously proposed the analogy of a machine that produces one dollar per year in perpetuity. He asks how much would you pay for this machine? Clearly it is worth something more than $1.00. And it’s equally clear that it’s not worth $1,000. The value is somewhere in between. But where? This leads to the concept of discount (which we mentioned in Falling Productivity of Debt two weeks ago). A dollar to be paid next year is worth less than a dollar in the hand today. One reason is that...

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  • What Selloff: Futures Rebound, Nikkei Extends Record Winning Streak

    European shares are modestly lower as investors monitor tense events in Spain and as focus turns to Thursday’s ECB meeting; US equity futures have rebounded from yesterday's sharp but shallow selloff and are in the green amid rising odds of U.S. tax reform and the imminent unveiling of the next Fed chair while Asian shares rise and Japan extends its winning streak to a record 16 days. The euro edged higher after data showed Europe’s economy is maintaining momentum, while the USDJPY managed to...

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  • Falling Interest, Gold and Silver Report 22 Oct 2017

    Last week, we discussed the marginal productivity of debt. This is how much each newly-borrowed dollar adds to GDP. And ever since the interest rate began its falling trend in 1981, marginal productivity of debt has tightly correlated with interest. The lower the interest rate, the less productive additional borrowing has in fact become. Let’s look at a recent event: the Ikea acquisition of TaskRabbit. You might wonder, why does a home goods company need to own a freelance labor company?...

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