$VIX daily: Looks to be ready for a ST bounce, and SPX is getting closer to a move down into the next DCL. We shall see how it plays out.
SPX daily: The consolidation continues....
“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side” Jesse L. Livermore
$VIX daily: Looks to be ready for a ST bounce, and SPX is getting closer to a move down into the next DCL. We shall see how it plays out.
“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side” Jesse L. Livermore
BPSPX topping pattern: Getting close to completing...... We shall see how it handles the next daily cycle....
“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side” Jesse L. Livermore
SPX daily: This has been one sweet DC - daily cycle. The move up continues.....
“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side” Jesse L. Livermore
AGG daily: Back testing the 10 day MA.
“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side” Jesse L. Livermore
FOMC Meeting
Stocks broke bullishly out of consolidation on Friday and continued higher into Tuesday, ahead of Wednesday’s FOMC meeting.
Tuesday was day 31 for the daily cycle. That places stocks in its timing band for a daily cycle decline. As I motioned in the Weekend Report, breakouts that occur late in the daily cycle are often not sustained. Stocks are currently in a daily uptrend. Stocks will remain in its daily uptrend unless they close below the lower daily cycle band.
FOMC Meeting | Cycle Trading
“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side” Jesse L. Livermore
The Fed effect, and I'll be watching. We shall see how it all plays out. Some crazy stuff going on in DC too.
USD daily:
The U.S. Dollar
Like the U.S. dollar.
The dollar is fascinating. Some analysts consider the dollar a safe haven. Others say the dollar seems to do well when the U.S. economy is doing well.
The truth is, both camps are correct...
In many ways, the dollar is the ultimate safe haven. As the global reserve currency, it’s backed by the full might of America. That’s why during times of uncertainty, you can see the dollar strengthen quickly.
When looking for a safe haven, the U.S. has many attractive options. Whether it’s Treasuries, stocks, or just plain old cash, the U.S. has something for everyone.
Why GM’s embarrassing EV hiccup could skyrocket 1 battery firm
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They’ve signed the paperwork… handed over the deposit…
But so far this year — GM has delivered just 2 electric Hummers. Two!
“This is just the tip of a $10 Trillion iceberg,” says the best-selling financial author Nomi Prins, “No automaker is safe.”
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She calls it “Forever Lithium.”
The CEO of Jeep said: “You have to secure your supply. If not, you’re out of business.”
And one company that supplies it could mint more EV millionaires than the rise of Tesla.
On the other hand, let’s say the U.S. economy is outperforming the rest of the world by a wide margin. In such a scenario, the dollar can also strengthen.
During such a time, investors are afraid of putting their money to work in emerging markets. While emerging markets can deliver better returns, they’re also riskier. And if the global economy is lagging the U.S., then investing in the U.S. is the best move.
What about when the dollar is declining in value? That scenario happens for a couple different reasons as well.
The first is when other countries are successfully outcompeting the U.S. for investment flows. If growth prospects are considered more attractive outside the U.S., there will be less demand for the dollar.
The second scenario is when investors see weakness in the U.S. economy. This means they expect the Fed to cut interest rates to help the economy out.
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More Weakness Coming
Right now, we’re trending more closely to the second scenario, which results in dollar weakness.
The reasoning is simple. Higher rates should cool off the economy. And it’s unlikely the Fed will get the balancing act of raising rates high enough to tamp down inflation – while not sinking the economy into a recession – exactly right.
If the Fed overshoots raising rates, the economy will eventually start cooling down. At this point, the Fed will go back to its old playbook of cutting rates and printing money to help stimulate the economy.
Although more and more central banks are expected to hold rates – or even cut them – next year, the Fed is likely to be among the first to act.
This was true in the opposite direction, too. The Fed was the first major central bank to raise rates in 2022.
It was the Fed that kicked of the dollar’s period of strength in 2022. And it will be the Fed that kicks off this next period of dollar weakness.
In fact, the decline in the dollar has already started. At the beginning of October, DXY was up nearly 4% year-to-date. As of writing, DXY is now up just 0.37%.
Based on my analysis, I expect at least another 10% decline or so before the dollar stabilizes.
Happy trading,
The Dollar Decline Has Started | Jeff Clark Trader
“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side” Jesse L. Livermore
For traders only:
QQQ and PSQ daily: Getting late in the cycle: I bought some PSQ..... However, everything I track using my system remains on a buy signal. When we get deep into a daily cycle I reduce or take a small short position for some Beer Money.
Filled Buy 500 PSQ Market 9.8899 11:47:32 12/13/23
“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side” Jesse L. Livermore
SPX daily and FED speak.The market sure liked the comments......
“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side” Jesse L. Livermore
SPX/QQQ daily: Day 33 of the current daily cycle, BPSPX topping pattern in play, a move above the upper BB, a move under 11.50ish for the VIX, and a few other Risk Management indicators.
Bottom Line: The odds for trading on the long-side have increased. However, I still DO NOT have a sell signal. We shall see how it plays out. The move up continues, but stretched above the 10 day MA.
“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side” Jesse L. Livermore
SPX monthly:
SPX/BPSPX/VIX daily:
The Secret Life of Fed Pivots
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John P. Hussman, Ph.D.
President, Hussman Investment Trust
December 2023
Speculative bubbles collapse. I don’t know how to make that point simpler, but somehow it needs to be said. Still, attention to investor psychology – speculation versus risk-aversion – can help enormously. A market crash is nothing more than low risk-premium meeting risk-aversion. Indeed, when investors become risk-averse, they treat safe liquidity as a desirable asset rather than an inferior one, so creating more of the stuff does nothing to support stocks. That’s how the market could collapse in 2000-2002 and 2007-2009 despite aggressive and persistent Fed easing.
The yearning affection that investors hold for Fed pivots is quietly driven by the fact that nearly all the pivots occurred when the S&P 500 already stood at historically normal or depressed levels of valuation. The associated market returns were typically a function of two factors: favorable valuations, coupled with an improvement in market internals. It’s those factors – the central elements of our investment discipline – that actually correlate with favorable market outcomes.
The Secret Life of Fed Pivots - Hussman Funds
“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side” Jesse L. Livermore
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