Smoking Securities

Half Baked High Finance

Archive for the ‘USB’ Category

Signs of Recovery

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Despite the media frenzy over high unemployment and other worrisome economic headlines, there are signs the global markets are stabilizing, and that risk taking is increasing.  I have a shit ton of charts to prove this point, way too many for the average Joe, so I’ve narrowed it down to 5 for this post.  If you find yourself confused and you cannot make heads or tails of the X’s and O’s, please bear with me as I am still working on a user guide to my charting method.  Without further ado, let’s get to the numbers.

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NASDAQ Bullish % Index : NASDAQ Volatility Index

Unlike its sibling chart BPSPX:VIX, the NASDAQ “Bullidex” (Copyright Trademark Patent Pending) is beginning to show signs of strength, though the new “2” on the far right representing February obfuscates the fresh X.  This signifies an increasing number of NASDAQ stocks in bullish formations amidst declining volatility, though the indicator remains in dangerously bearish territory.  So long as this trend continues, the market will favor bets on the long side, but since daily swings remain violent, I’m still using cautious position sizes.

Emerging Markets

Emerging Markets

Emerging markets have entered a new uptrend, which bodes well for the market in general.  Since this asset class is considered high risk, it is good to see interest in this sector.

FXY

FXA : FXY

The Yen carry trade may be resuming as people sell low yield Yen to acquire the badly beaten AUD.  This is an excellent sign of reflation, so keep an eye on this.

SPX Volatility Index

% of SPX Stocks Above the 50 DMA : SPX Volatility Index

SPX stocks trading above the 50 DMA are increasing with relatively lower volatility.  This is the first sign of a bullish trend in the SPX, but stay cautious as there are other red flags in the sector.

Gold

30 Year US Treasury Bond Price : Gold

Treasuries have had a remarkably steep sell off relative to gold, and this suggests an end to the credit crisis that plagued investments in 2008.  Look for further weakness in the Treasury market as people move from “risk free” yield to assets with greater potential for price appreciation in the changing environment.

The specter of deflation is being replaced by an inflationary trade.  Precious metals seem to be fairing the best, and gold miners are not far behind.  Stay flexible, and don’t pay attention to the headlines that espouse the impending doom of the U.S. financial system.

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Written by chucklesamadeus

February 9, 2009 at 6:14 am

Posted in BPCOMPQ, EEM, FXA, FXY, Gold, SPXA50R, USB, VIX, VXN

Ratios to Reason

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There is evidence of new trends emerging in the market.
US bonds look ready to head lower relative to their foreign counterparts. Will another cycle of credit shock prevent this trend?
Although the SPX indicator remains bullish, the NASDAQ is now bearish for the first time since the end of November. This implies an environment of increased volatility with a lower percentage of stocks trading above their 50dma.
The spread between the SPX buy write and its underlying is currently bearish because it is rising. Moreover, the 10sma is beginning to flatten, so a break of recent resistance would be even more bearish.
The Yen is rising against the USD and that doesn’t bode well for equities. Perhaps it will retest the recent highs before the BOJ acts again.
Treasuries are technically in a downtrend relative to gold, and that puts the dollar in jeopardy. Perhaps another round of credit crisis will bring money back to the ol’ U.S. of A.

The market looks poised to break lower, but there isn’t enough cause for alarm to run to the exits yet. Increasing volatility is certainly a bearish symptom, and considering the massive run up since the November lows, a move lower is quite reasonable. The numbers being released Friday are utterly meaningless, but the reaction will be critical.

On a side note, it’s good to be back online with a working computer. Although the imbeciles at Office Depot raped my face and charged 100+ clams for an AC power adapter, I will have the last laugh; their awesome 14 day return policy is effectively a free rental. Now that I’ve bought another on Buy.com for 29.99, maybe I’ll swallow the power chord and floss my intestinal tract before returning this P.O.S. adapter to the Office Despots.

Written by chucklesamadeus

January 8, 2009 at 7:43 pm

Posted in BNDGLB, BNDUS, BPCOMQ, BXM, FXY, Gold, SPX, USB, UUP, VXN

Monday Mutterings

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It was a choppy roller coaster day, but there were some bright spots.
International markets stayed afloat as commodities moved up.
The financial sector finds itself in peril once again. Stay away from the big names who are too big to fail. Their bond holders might see cash, but the equity gets wiped out.
HYG printed another near term high, but the upper Bollinger is a good place to take profits.
Treasuries made a new high, but in an ominous fashion, reversed and sold off sharply till the end of the day. I’ve acquired some TBT and will add more if the tape presents itself.
The weakness in equities and strength of commodities versus bonds was unusual. I purchased a tiny amount of DBC to take advantage of the money leaving Treasuries.

Short trades continue to pay, but the weakness in bonds is divergent with the direction of equities. The money leaving the safety of bonds must go someplace, potentially energy and precious metal related categories. This market continues to move slowly relative to the past few months, but stay focused and take advantage of the few opportunities 2008 still offers.

Written by chucklesamadeus

December 29, 2008 at 9:41 pm

Posted in ADR, BPSPX, Gold, HYG, PLW, USB, VIX

Digesting Indecision

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Not much action in the equities market this week.

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According to my indicator, the SPX has managed to stay bullish, but it is very close to resuming a downtrend.

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The buywrite/index spread is rising (bearish), but it is in a resistance area, and any turn around would be bullish.

NAMO081227 

The NAMO has turned positive, which is good for equities.

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The summation index continues to rise, another reason to be positive on stocks.

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Finally, the 30Y Treasury is beginning to show weakness relative to Gold.  This may signal an end of deflationary fears.

 

Until volume returns to the market, any move should be view with suspicion if you’re a trend trader.  Equities remain range bound, so I’m focused on opportunities in fixed income.  I suspect the primary direction of 2009 will be revealed within the first two weeks of January, so I will continue to sit patiently, watch Twitter and play the Ukulele during market hours.

Written by chucklesamadeus

December 27, 2008 at 12:47 pm

Posted in BPSPX, BXM, Gold, NAMO, NASI, SPX, USB, VIX

Market Makeup

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A rundown of various market themes for tomorrow’s trade.
Despite the hefty haircut in the QQQQ’s, my NASDAQ indicator is still bullish. Buy the dip is still in play until I see some O’s, but I’m taking very small positions.
The BXM/SPX ratio is bearish as long as it is printing X’s. Nevertheless, it is approaching resistance and a 10sma downtrend.
After mentioning HYG here, I rode today’s wave up and I’m adding to it as the tape presents itself. JNK also has breakout potential.
Another bullish indicator is the rising summation index.
The first sign of potential inflation is here as the spread trend between the 30Y Treasury and Gold begins to loose momentum.

Today’s action was a little hairy for a buy the dipper, and if there wasn’t such a strong late day rally, I’d be pretty worried. Tuesday will be critical as further weakness will likely make my SPX indicator bearish. Smooth trading to all, and happy Hanukkah to my fellow tribesmen.

Written by chucklesamadeus

December 22, 2008 at 7:39 pm

Posted in BPCOMPQ, BXM, Gold, HYG, NASI, SPX, USB, VXN

Rendering Ratios

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On final chart post for this weekend.
My NASDAQ indicator keeps printing X’s signaling lower volatility and more bullish stocks.
The intervention I was looking for here is underway. Don’t fight the BOJ until you see another X printed.
Gold and precious metals like silver continue to put in nice uptrend work. This remains the best sector for any long bets.
More NASDAQ stocks are trading above their 50dma on lower volatility, another bullish sign.
The only thing holding back the inflation trade is the strength of long term Treasuries.

Nothing too crazy in this mix, but I like to keep track of EVERYTHING. Sometimes it feels like busy work, but you never know where future insight will lie. Next up, getting my X-mas wish list ready.

Written by chucklesamadeus

December 20, 2008 at 7:24 pm

Posted in BPCOMPQ, FXY, Gold, HUI, NAA50R, USB, UUP, VXN

Monday Mutterings

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I hope to God that the chart below is a misprint and not a premonition.
If bonds make a move like that, this crisis is going to take a turn for the worst.
Though we closed positive Friday, my indicator fell, suggesting a bearish divergence in an uptrend. Buy on the dip is still in play, but sell on the rip may soon be in order.
The spread between US Equity and Bonds is battling with resistance. A resumption of the downtrend is likely, but has yet to be confirmed.
Yen versus USD continues to be a winning trade.
Priced in gold, the 30Y Treasury has pulled into support. Until this trend breaks lower, inflation plays will move lower or sideways.

This market is giving lots of mixed messages. I’m expecting range bound trading if volume is low, and a volatile break down if shares start to move. This means I’m most unprepared for high volume accumulation and mark up, so I will be watching for such action like a hawk.

On another note, I’m starting a computer service company in Seattle, so if anyone has arcane suggestions, please feel free to leave a note.

Written by chucklesamadeus

December 15, 2008 at 12:29 am

Posted in AKG, BPSPX, CPMKTB, CPMKTE, FXY, Gold, USB, UUP, VIX