FINANCIAL MARKETS OVERVIEW FOR MONDAY: (12/19) The chance for the Electoral College to trump Trump and send a decision to the House on Monday seems rather unlikely. Still, the markets may remain quiet until the all-clear signal is out. More disturbing are many other news items including the Chinese capturing a US drone submarine, more saber-rattling by Obama and even the FBI concurring with the CIA around evidence about hacking despite the fact Wikileaks denies the Russians were the source. What no one is doing is denying is the content of the hacked emails showing dirty tricks to win the Democratic candidacy and the pay-for-play Clinton foundation doings. What is also implied by the press is that the Russians changed the results of the election by hacking into databases around the US which was not possible as they were offline. So more spin. We don’t think it will be over until the Inauguration. We do see that stocks should rally this week and bonds recover and the dollar turn lower and gold turn higher. It’s possible that some final flourish could complete patterns that have not quite come in on the dollar and silver – but maybe they don’t have to.
T-notes would look better with one more new low
FOR FRIDAY: (12/16) One would think that the markets may rest after this week’s excitement. We’re open to the dollar still being up a bit more and that might push gold down a bit. Stocks are dealing with quadruple witch and t-notes would look better with one more new low. Markets may be wondering if there will be any Electoral College fireworks.Continue reading
Stocks still need to congest a bit lower
FOR THURSDAY: (12/15) Bank of England results will be by morning and no rate hike there will not be helpful for US/GBP cross rates. Stocks still need to congest a bit lower before the next buy sets up. Gold and the dollar could be done very quickly and we could be setting up for end-of-the-year congestion and waiting on the Electoral College and the Inauguration.Continue reading
Patterns looking temporarily complete
FOR WEDNESDAY: (12/14) Another FOMC day. This one is a done deal but will we get a lot of sell-the-fact and buy-the-fact energy? Probably. So many patterns seem temporarily complete. In the end we don’t like these days because they’re still a bit too much of a meat grinder from the computer ALGOS.Continue reading
Dollar looks lower one more day, gold higher
FOR TUESDAY: (12/13) Market is waiting on FOMC on Wednesday but is the Electoral College vote background noise that is making traders nervous? The dollar looks lower one more day and gold higher. Not seeing weak cycles for stocks on Tuesday but patterns need to go to 2230 this week. T-notes are done in a major way soon at 123.03.Continue reading
Stock still looking higher
FOR MONDAY: (12/12) Lately Mondays have been sluggish and that should be the case again before FOMC on Wednesday. Hard to take new positions but seems like we can play 1-2 day pullbacks if we get them. Assuming the trend will continue with stocks higher into at least Dec. 22-23.Continue reading
S & P may retrace for a few sessions
FOR FRIDAY: (12/9) Europe is out of the way for the week but everyone is a bit beaten up and bruised already. We’re thinking the S & P will retrace for a few sessions but it’s not a major short. Gold may recover a bit to the upside and the dollar will retrace absurd movement from Thursday. Let’s hope we can rest also after an exhausting week.Continue reading
No risk/reward on many markets
FOR WEDNESDAY: (12/7) We feel a bit in “limbo-land,” once again waiting on a major report with ECB. The market overreacted on Monday’s bounce and FOMC into Dec. 1 should be a non-event. Even if we wanted to take a position, the risk/reward on many markets isn’t there. Then we have stocks ready to roll to March futures on Thursday and that often creates distress. For now we’ll wait for the morning. There’s a lot tension building out there and a lot of anxiety and a sense that more big/absurd/illogical moves could happen but we have to wait for the right spots.Continue reading
Euro breakout possible
FOR TUESDAY: (12/6) Trade waiting on the ECB on Thursday and the feeling is that QE will come to an end and that rate hikes will come eventually and the Euro is happy—and it is very oversold anyway. We have more of a bias for an upward breakout on stocks than a breakdown. There is a sense from currencies that a more significant turn is happening for December and yet we need a few more clues–and the chance for acceleration right away before ECB seems unlikely for the Euro or the dollar.
T-notes due for a 4th-wave bounce
FOR MONDAY: (12/5) Given our experience with Trump and Brexit, how much and how long will markets be impacted by a “No Vote” by Italy and can we be surprised by anything else. I suspect that by the morning session, whatever damage has happened will be negated. If we can, we will put out a report on Sunday afternoon or night. In the end we can only trade patterns and cycles, and patterns suggest that stocks have to eventually go lower this month even if we get a freak bounce first. T-notes are due for a 4th-wave bounce to 125.22 basis March and the dollar should hold 102.22 basis March futures. While these moves look exciting, you have to buy just right and have big pockets. In the end, no one wins in the meat grinder unless you stay up all night and watch and monitor and use trailing stops.Continue reading