pebblewriter

Posts

  • Reality Bites

    We’ve had a 4.75% target for the 10Y for almost 2 years – reasoning that the breakout in oil/gas prices would eventually force inflation and interest rates higher [see: The 10Y Breaks Out] and equity prices lower.

    Sure, the Fed was able to postpone it with the usual misleading jawboning. But, the bill has finally come due.

    Higher interest rates, coupled with high energy, housing, and grocery bills and the resumption of student loan payments, present a considerable challenge to the American consumer and economy alike.

    Now that the 10Y has reached our target, what does the future hold?

    Can the damage to stocks be limited to just a backtest of the 200-day moving average?continued for members… (more…)

  • Charts I’m Watching: Oct 2, 2023

    Following a brief relief rally after the 6-week budget “fix” over the weekend, futures have resumed their decline.

    continued for members… (more…)

  • Update on USDJPY: Sep 29, 2023

    We’ve been accurately forecasting USDJPY for over 12 years, starting with recognition of a falling wedge that yielded a huge breakout in 2011 [see: USDJPY – How Low Can it Go?] and evolving to an understanding of the importance of the Yen Carry Trade.

    The Japanese economy is a hot mess, but the chart patterns have been fairly easy to discern. When there’s any doubt, remember two principles:

    (1) The BoJ will do whatever it takes to keep stocks on the rise.
    (2) Ignore any other principles.

    So, when a channel breakout occurred in March 2021 [see: USDJPY’s Turn] in the wake of the 35% Covid crash, we were right on top of it. Likewise, we could see the ginormous Inverted Head & Shoulder Pattern coming from a mile away.   USDJPY zipped up through the “resistance” and has tagged every target we’ve set for it. It has further to go, though the path should continue to confound everyone but chartists.continued for members… (more…)

  • PCE Softer Than Expected

    Futures added to their overnight gains following release of softer than expected August PCE (+0.4% versus 0.5%.)

    It remains to be seen whether the cash market can continue to whistle past the government shutdown graveyard.

    continued for members… (more…)

  • Update on Currencies: Sep 28, 2023

    The currency pairs on which we focus reached our long-time targets on Tuesday. While good for the ego, it’s always a mixed bag for yours truly. It means a broad reassessment of the path forward at a time when the signposts are not terribly clear.

    First, a recap. EURUSD indeed reversed after reaching our 1.1273 target last July [see: July 18 Update] and obliged us by dropping to test our downside target at 1.0658.  From that post:

    And, the price action since:

    Note that EURUSD has dropped through that original 200-day moving average and has continued lower.

    continued for members… (more…)

  • Charts I’m Watching: Sep 27, 2023

    Futures have rebounded modestly following yesterday’s drubbing.

    The Conference Board’s Consumer Confidence Index’s plunge from 108.7 to 103 did little to convince investors that the consumer is still doing well. Perhaps the more important question: will it outweigh, in the minds of FOMC members, the stellar 0.9% increase in August for core capital goods?

    continued for members… (more…)

  • The Confidence Game

    Futures are sagging once again as they test our latest downside target to be tagged.

    One has to wonder how much ground will need to be given up in order for consumer confidence to drop back below 100.

    Note that the Dow is testing its 200-day moving average – always an important threshold when it comes to investor confidence.continued for members… (more…)

  • Charts I’m Watching: Sep 25, 2023

    Futures nailed our next downside target last week, and are slipping a little more this morning to test a key channel line.

    continued for members… (more…)

  • FOMC Decision Day: Sep 20, 2023

    Futures are up moderately in advance of this afternoon’s FOMC meeting.

    continued for members… (more…)

  • Charts I’m Watching: Sep 19, 2023

    Futures are off moderately in advance of tomorrow’s FOMC decision.

    continued for members... (more…)