Rally Faces Another Test

Futures have given up all of Friday’s rebound gains and then some, again testing the IH&S neckline and the bottom of the rising white channel from last March. At the risk of sounding dramatic, a failure of the channel would mark the end of the current rally and usher in the correction suggested by our … continue reading →

Housing Boom: 2007 Redux

Single-family home starts continued to gain from rock bottom interest rates and the exodus from urban, multifamily housing amid the pandemic. September residential starts grew 1.9%, while permits rose 5.2%, the fastest since the 2007 peak. Single-family inventory dipped to 3.3 months, the smallest since 1963, while multifamily starts cratered by 16.3%. It was a … continue reading →

Trade Troubles

The trade deal: the gift that keeps on giving. The August trade deficit came in at $67.1 billion, the largest since 2006 – partly a reflection of the pandemic but exacerbated by a 9.3% collapse in the value of the DXY since its March highs. At the same time, oil and gas prices have spiked … continue reading →

The Road Ahead

Futures ramped higher overnight, continuing to dance to the tune of VIX’s smackdown and ongoing rumors of a fiscal stimulus deal… …and ignoring troubling pandemic facts. But, we’re finally into October and Q4. And, as we discussed yesterday, things are about to get very interesting. continued for members… … continue reading →

The Dollar’s Demise

If our charts are to be believed, we are on the cusp of a significant move in currency pairs and the bond yields. 10Y yields plunged back in March, then began rebounding via a long, drawn-out flag pattern that broke down in late June. Since then, it has been tracing out an equally long, drawn-out … continue reading →

Currencies: A Turning Point

Lots going on this morning, with currencies joining VIX in leading the equity circus. EURUSD smashed its March highs and is closing in on one of two levels of overhead resistance as DXY tests an important channel bottom. The next moves for each will have important implications for the economy and for algo-driven equities. ES … continue reading →