Stocks pulled back a bit yesterday after Tuesday's big rally. No big surprises. Volume was light, seasonality strength is still holding, but the charts are looking for something to break.
I am running late tonight (it's Wednesday night as I write) so rather than speculate, spew conjecture, and make predictions, I am just going to show you some charts that are making the headlines.
The S&P 500 remains in the rising wedge pattern, has resistance above and support below. It seems to be the only stable chart left out there.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
What do I mean by that? Have you seen bonds and bond yields lately? Bond yields are absolutely plunging. This is a weekly chart going back over five years. They have been falling off of the table in the last few weeks.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Falling bond yields means higher bond prices. Here is a weekly chart of the 30-year bond. An amazing run.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Fed has said that it is going to do anything and everything to stabilize the credit markets, which means cutting rates aggressively, and making money readily available to lend. What happens to the value of the U.S. dollar when they do that?
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We saw a nice rally in the dollar beginning this past summer, but it is giving back those gains quickly. The other day I talked about the dollar chart putting in a head and shoulders pattern and said that the initial downside target would be around 80.50. It did that in just a couple of days, and has cut through it like a hot knife through butter. The dollar weakness has been a big help to the I-fund which is now up 9% in December alone.
I have no idea what to expect next for the dollar and bonds, but I think the ball is now in the court of the Europeans to start cutting rates aggressively as well. The U.S. has taken the lead and it has hurt the dollar, but that could change if and when we start seeing rate cuts overseas.
That's all for today. Thanks for reading. See you tomorrow!
I am running late tonight (it's Wednesday night as I write) so rather than speculate, spew conjecture, and make predictions, I am just going to show you some charts that are making the headlines.
The S&P 500 remains in the rising wedge pattern, has resistance above and support below. It seems to be the only stable chart left out there.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
What do I mean by that? Have you seen bonds and bond yields lately? Bond yields are absolutely plunging. This is a weekly chart going back over five years. They have been falling off of the table in the last few weeks.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
Falling bond yields means higher bond prices. Here is a weekly chart of the 30-year bond. An amazing run.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Fed has said that it is going to do anything and everything to stabilize the credit markets, which means cutting rates aggressively, and making money readily available to lend. What happens to the value of the U.S. dollar when they do that?
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We saw a nice rally in the dollar beginning this past summer, but it is giving back those gains quickly. The other day I talked about the dollar chart putting in a head and shoulders pattern and said that the initial downside target would be around 80.50. It did that in just a couple of days, and has cut through it like a hot knife through butter. The dollar weakness has been a big help to the I-fund which is now up 9% in December alone.
I have no idea what to expect next for the dollar and bonds, but I think the ball is now in the court of the Europeans to start cutting rates aggressively as well. The U.S. has taken the lead and it has hurt the dollar, but that could change if and when we start seeing rate cuts overseas.
That's all for today. Thanks for reading. See you tomorrow!
