Russell Shor

Featured Image by MichaelWuensch from Pixabay

Fed Chair Jerome Powell is due to testify in front of the Senate Banking Committee today at 3:00 pm GMT. Mr. Powell is seeking confirmation of his reappointment as Chair of the Federal Reserve. Given that inflation is running at its fastest pace in almost 40 years, it is expected that a large part of the proceedings will be dedicated to reaffirming that the Fed will use its available resources…

Daily The daily charts below show the DJI (US30) on the left, the SPX (SPX500) in the middle, and the Nasdaq (NAS100) on the right. All three indexes dropped following the release of the Fed's December minutes last week. Of the three, the NAS100 shows relative weakness and is between the lower blue and red bands. The US30 and SPX500 are in the neutral areas between the blue bands, with…

Weekly Chart Oil prices rose off of the supply disruptions in Kazakhstan and Libya, effectively ignoring any demand scares from rising Omicron infections. The interruptions are due to protests in Kazakhstan affecting transport channels and pipeline maintenance in Libya. The weekly chart below shows that USOil has charted a higher trough, and, if it can push above 85 (aqua horizontal), will chart a higher peak. If this happens, USOil will…

The charts below show an interesting relationship between gold and bonds. The top chart is XAUUSD, the middle chart is IEF - iShares 7-10yr Bond ETF, and the bottom chart is the US 10 Yr. Treasury yield. The red trendline shows the period between the third quarter of 2018 to the middle of 2020. During this period, gold and bond prices both appreciated, whilst yields declined. The orange trendline represents…

Below are the daily charts of the Dow Jones Industrials (US30 on the left) and the Nasdaq (NAS100 on the right). The US30 maintains its position in the bullish area, between the upper blue and red bands (zone 1). Its stochastic is above 80 (aqua rectangle), suggesting a relatively stable upwards momentum. Conversely, the NAS100 has declined over the last two trading days and now finds itself in the bearish…

Introduction The minutes from the Fed's December meeting indicate that members are concerned over surging inflation and that they also feel that the job market is near full employment. They also suggest that the central bank's balance sheet is due to be normalised, with the intentional reduction of Fed bond holdings. The runoff is likely after the Fed kicks off with its hiking cycle. Moreover, the Fed's acceleration of tapering…

The USDJPY weekly chart has had five weeks of gains since its November low (aqua ellipse). One of the reasons for this is that the JPY is considered a haven. The fact that it has been depreciating against the USD indicates a risk-on sentiment. Given this, it is no surprise that equity markets had a strong December. However, we note that the currency pair's RSI has moved into an overbought…

Gold (chart A) has effectively moved sideways on an absolute basis since July 2020 (area between blue verticals). Of interest, this has tracked a similar trajectory for FXCM's USDOLLAR basket (Chart B). As such, and with no surprise, the relative strength ratio (Chart C) between the two reflects neutrality in performance (USDOLLAR has slightly outperformed XAUUSD, as per the positively sloped red dashed line in chart C). The green dashed…