TradersClass

Superior Trading Skills through Education

 
Next Wednesday, up they go again... Print
Written by Site admin   
Thursday, 07 June 2018 20:01

The consensus is the Federal Reserve, at it's June FOMC meeting Wednesday 13th, will confirm the next US interest rate increase, from 1.75 to 2%:

fomcjune18

The consensus, 'dot' plot and forward guidance is as plain as day. But, today, the bond market just had a hissy fit...

30yrbondjune18

The standard 30 year US T Bond has been tumbling down this year. Interest rates do the opposite of course, moving on up as bonds slide. But just look at the chart. The chart bottomed on May 18th, rallied then tumbled again, until today, June 7th.

The 4 hour chart shows a major key revesal day, lower early in the day then higher than yesterday. Key reversals (or the candle version, Bullish Engulfing) are one of the strongest one day signals in the market.

What does this mean?

Maybe nothing more than traders liquidating their previous short position profits, just in case something unexpected comes out of the Fed minutes.

Or - the market just got the idea the Fed will change it's mind and delay the increase. The dollar will tank and stock markets will soar even higher. Stranger things have happened, just when everyone least expect it.

 

 

From the blog

It Started with a Kiss - three in fact....

It started with a kiss - three in fact.....

Here we are again.

Those Westminster politicos have left us in yet another muddle, only more so. And Boris? it's a re-run of Theresa.

Off he popped to Eire then it's across to the continent. He's just what Barnier and crew wanted: A ham-strung, cornered British PM who, it seems, can now only grovel for one or two crumbs of improvement to Theresa's deal.

Leaving all that idiocy to one side, this week we have had some amazingly good economic news.

On Monday GDP improved by 0.3%, better than the 0.1% the market expected. Manufacturing production was also better at 0.3% against an expectation of -0.3%!

Today, Tuesday, we are treated to better than expected unemployment numbers and an average earnings increase. Mark Carney, talking this morning, seemed less concerned about the UK than with the slow down in global trade.

So what of the UK stock market?

Whilst the GBP has been rallying the FTSE100 has moved a little, but is lagging behind US and European stock markets.

Is now the time to be wading in?

The waves are suggesting a substantial move is due. A series of down waves has ended with a flat and three kisses.

The new up wave has broken above the last major lower high, a good sign. A possible corrective wave two will have completed if the Footsie can move above Monday's high. That would be the start of the money wave, W3.

As with most technical patterns, a triple bottom fails as many times as it leads to a reversal. But what this chart is telling us is that the FTSE is not yet ready to collapse - as long as it stays above the red line!

Mark Carney stated the obvious during his talk: Once the Brexit outcome is settled, major moves and investment is likely, given the last three years of uncertainty. The big question is, how much longer will the uncertainty last?

Perhaps we are about to see investors not waiting for certainty any longer.

Check these links

  • JoomlaWorks Simple Image Rotator