Emerging market currencies had a relief rally over the past month. U.S. dollar weakened against most of the emerging market currencies with the expectation of a possible delay on FED rate hike. Counter-trend moves in the emerging market currencies might be over and we can see another phase of weakness. An important EM cross-rate is the U.S.Dollar/Indian […]
Global equity markets are showing weakness. A possible change in trend is in progress. Over the past few decades 2 year moving average proved to be a good indicator for following long-term trends. Price is now below the long-term average and as long as it remains below this technical level probability of further correction in equity markets […]
It started with weakness in emerging market currencies (archive for emerging market currencies) then it spread to equity markets and now emerging market yields are under pressure. From commodity exporting economies to energy importers, almost all emerging markets experienced high volatility. Charts are telling us that the high volatility is here to stay and possibly […]
CBOE Volatility index moves into a new territory of high volatility. Usually high volatility periods suggest corrections in equity markets. In the past several decades breakouts above 20 levels on the VIX was followed by major equity market corrections. Chart shows CBOE Volatility Index with weekly closing prices. Last week of August the VIX closed […]
U.S. dollar strength is here to stay. Greenback had a strong recovery last week. Strong dollar will continue to put pressure on commodities, commodity currencies and also emerging markets. In other words, weak emerging markets, commodities and strong U.S. Dollar trend is likely to continue in the following months. After its breakout from a decade-long […]
China devalued its currency. This opened the door for further depreciation for the Chinese Yuan and also for currency wars between the Asian economies. Over the past two years emerging market currencies have performed poorly against the U.S. dollar. Weakness was mainly driven by commodity exporters. Now, strong U.S. dollar, weak emerging market currencies trend is […]
I’m not a big fan of diagonal support/resistances. I like horizontal and clearly defined support/resistance levels on price charts. Especially horizontal support and resistance levels on the weekly and monthly scale charts. However, current price action and the outlook on the U.S. indices is worth mentioning. Most of the major Dow Jones indices are rebounding […]
European indices are at critical levels. Breakout higher could result in a multi-year uptrend. Failure to clear those strong long-term resistance levels could signal the end of last 5 year’s uptrend. Whatever the outcome, the implications will be long-term. STOXX EUROPE 50 index cleared the 15 year-long trend resistance in late 2014. EURO STOXX 50 […]
Unless gold prices recover above 1,130 levels in the following weeks, probability of a sell-off towards 1,000 levels will increase. In mid-July gold price broke below the support range between 1,130-1,150. Since then the rebound has been weak and price failed to recover even above 1,110 levels. Lower boundaries are considered to be negative extremes […]
Weakness in emerging market equities can be seen across the board. From commodity exporting South American countries indices to China’s trading partners in emerging Asia, all show downtrends. Head and shoulder top is a bearish chart pattern and usually forms after prolonged uptrends. It acts as a reversal chart pattern and successful completion could result […]
