If the Fed is going to begin taking away the punchbowl why is the dollar tanking?

For a number of weeks the Fed has been talking about “tapering” its asset purchases, and from the recent spike in US government bond yields and the decline in US equities it seems as though investors them at their word. This does however raise an interesting question: If the Fed really is going to begin taking away the punchbowl why is the dollar tanking?

Read more...

Why talk of Fed “tapering” is just talk

Investors expect the Fed to begin reducing QE as early as this summer. However, whether or not the Fed follows through on “tapering” largely depends on whether the US economy can stand on its own two feet without support from the central bank? Our view is that it cannot and this article examines why that’s the case and why talk of “tapering” is just talk.

Read more...

Gold Falls to 3-Week Low with “Talk of Slowing QE” Weighing on Markets

Spot gold fell to three week lows below $1370 an ounce Tuesday, as stocks and commodities also fell amid ongoing speculation over when the US Federal Reserve might begin reducing the size of its quantitative easing program. “Gold remains bearish while trading below the $1424 current June high,” reckons Commerzbank senior technical analyst Axel Rudolph.

Read more...

Market Wrap: 7 June 2013 – US equities remain in uptrend, palladium decouples from other precious metals & the Aussie dollar drops sharply

This regular column reviews the condition of several different markets including: stocks, commodities, currencies and precious metals. This week focuses on the Wilshire 5000, West Texas Intermediate crude oil, palladium, and the Australian dollar.

Read more...

Recommended Reading: It’s all one trade

The world’s finances may be reaching critical stress-points, and as Bill Fleckenstein points out in this excellent article, the recent cracks that have started to appear in the Japanese and US bond markets could be as significant as the first payment defaults that occurred during the subprime mortgage meltdown.

Read more...

Chart of the week: Europe in numbers – GDP growth rate, inflation rate & unemployment rate

The economies of Europe are in poor economic health. In the first quarter of 2013 overall growth within the Eurozone was negative for a sixth consecutive quarter and it is forecast to contract by 0.6% this year. Meanwhile the UK managed to avoid a triple-dip recession but inflation is still above target, and unemployment remains stubbornly high.

Read more...

Recommended Reading: Low Interest Rate Addictions

There is a great deal of debate over whether the ending of QE will adversely affect the US economy. The bulls believe that the Fed’s decision to “taper” is a reflection of an improving economic outlook. However, the bears argue that a Fed exit will trigger a spike in interest rates and a dramatic economic slowdown.

Read more...

Chart of the week: US Treasury yields spike as 30 year bond bull market comes to an end

For around 30 years US government bonds have been in a major bull market. The yield on the 10-year note made a low in July 2012 at around 1.4%, however thanks to the recent breakout above major overhead resistance it is looking increasingly likely that the multi-decade bull market in US government debt has come to an end.

Read more...

Chart of the week: Apple is trapped in a range but a breakout above $466 could be very bullish

Having dropped 44.8% from its all-time high on 21 September 2012 Apple encountered major support in mid-April at around $380. Since then the stock’s advance has been capped at around $466. However, if it can breakout decisively above this level it could be potentially very bullish for the stock which is already attracting both value and income investors.

Read more...

247Bull Trading Portfolio: Technology, materials & industrials give buy signals on breakouts & sector rotation

Until last month the technology, materials and industrials sectors within the S&P 500 had been trending down while other sectors such as health care, consumer staples and utilities had been trending up. Now however, the trend appears to be reversing and the sectors that had lagged behind are breaking out to new highs, something which presents a buying opportunity for traders and investors.

Read more...

Weekly Market Wrap: 3 May 2013 – Oil forms second tradable pattern while Japanese and US equities continue to power higher

This regular column reviews the condition of several different markets. This week’s column examines the chart pattern that has formed in crude oil, the best performing sector in the S&P 500 (the financials), and the powerful uptrends that exist within the Wilshire 5000 and the Nikkei.

Read more...