Russell Shor

Daily Charts February has started well for the significant US large-cap indexes. Below we have: * the FXCM Dow Jones Industrials CFD, the US30, on the left; * the FXCM S&P 500 CFD, the SPX500, in the center; and * the FXCM Nasdaq CFD, the NAS100, on the right. We have applied: * two Bollinger Bands, which effectively gives three areas – bullish, neutral, and bearish; and * a stochastic…

GBPUSD daily threatens to move out of its weak area, between the lower blue and red bands, and into the neutral zone (blue arrow). The red bands have expanded with the currency pair's downside swing (green rectangles). We note that yesterday saw a long blue candle, with follow-through today. Given the increase in volatility from the broader downside move, this rally may provide an opportunity. To this end, we regard…

Longer-Term Chart & Correlation The charts below show the following: * The top chart is the trimmed PCE inflation rate. * The second chart is the RSI of the trimmed PCE inflation rate. * The third chart is FXCM's USDOLLAR basket. * The fourth chart is a 12-month rolling correlation coefficient of trimmed PCE inflation to the USDOLLAR. Source:www.tradingview.com The red dashed vertical shows when core trimmed PCE, and the…

Oil is bid on the Russian-Ukraine tensions. UKOil, FXCM's Brent CFD, rose to a seven-year high, almost hitting $90/barrel. Other exacerbating issues are tight supply and Middle East geopolitical tensions between the Saudi-led coalition and the Iranian-backed Houthis. The weekly chart below (left) shows UKOil in its bullish zone between the upper red and blue bands. Both red Bollinger bands are moving upwards, which suggests an uptrend. The UKOil H4…

The left chart below shows the EURUSD daily. The price moved from the bullish area (upper blue and red bands) to the bearish region (lower blue and lower red bands). The lower band has turned down (black ellipse). If the upper band pushes out (green square), it will signal a further expansion in inherent volatility. The righthand chart shows the EURUSD hourly. The trend-following indicators have turned down (black ellipse),…

The Fed will release the FOMC statement at 7:00 pm GMT today, followed by a press conference thirty minutes later. The market expects confirmation that its rate hiking cycle will begin in March. The prospect of tightening is one of the reasons that the market shifted to a risk-off sentiment during January. However, inflation is currently at 7%, a threat to the Fed's price stability mandate. This poses a problem…

New Industry Paradigm Assumption Industries move through a series of stages as they evolve, each with their general characteristics. Growth companies tend to exhibit the following: Products that consumers know. There is a demand for the product. Price declines are evident as industry efficiencies occur. Competitors enter the industry; however, the "pie" is big enough to limit rivalry. Before lockdown, the streaming video entertainment industry was in the growth stage.…

The daily chart shows the Dow Jones Industrials (US30) on the left, the SPX (SPX500) in the middle, and the Nasdaq (NAS100) on the right. All three indexes trade in their bear areas between the red and blue bands. Notably, their respective Bollinger Bands have expanded as the downside volatility increases. Of concern are their stochastic indicators. Each is positioned below 20 (green rectangle), which is indicative of underlying bearish…

Middle East Tensions Crude prices have risen as tensions escalate in the Middle East. There is a fear of supply disruptions following an attack by Yemen's Houthi group against the UAE. The Houthis are aligned with Iran. whilst the UAE is a part of the Saudi Arabian-led coalition. The Houthis used missiles and drones, which exploded fuel trucks, killing three people, and started a fire near the Abu Dhabi airport.…

The left chart shows that FXCM's dollar basket, USDOLLAR, is positioned in the weak area on the daily time frame. I.e., between the lower blue and red bands. The hourly time frame has retraced to the 50% level of its previous impulse move down. Its stochastic has already turned negative and the EMAs are threatening to cross bearishly (aqua ellipses). If the stochastic continues down and hits the 20 level…

FXCM's US Banks basket includes equal weighting of JPM, BAC, WFC, C, and COF. Given that JPM, WFC, and C released their Q4 earnings before the market opened today, the US Banks basket makes for an interesting analysis. JPM's EPS beat estimates coming in at $3.33 ($3.01 - estimate). However, this includes a release of $1.8bn in loan reserves, without which it would have missed the estimate. WFC's EPS came…