Wednesday, June 29, 2016

Agriculture ready for launch?

Agriculture ETF DBA is in a long term downtrend since early 2011.However lately it moved fast, off a recent bottom at around 19.5
Lately DBA tried to penetrate a low supply zone between 23-24.5 however unsuccessfully and then retraced towards 2/1 Gann support where it bounced.
We expect DBA to move (soon) above 23 where it will quickly penetrate the aforementioned low supply zone and then move towards a heavy supply zone between 24.5-26 where it will probably stall (possibly around year end).
Therefore:

Is DBA ready for a launch?

If it manages to stay above 20.5 then probably it is indeed ready.

Monday, June 27, 2016

High Yield Bonds Break down

Today we saw a nasty break down for High yield Bonds(HYG) signaling further weakness initially  towards 78.5-80.Equities markets will probably follow.

Saturday, June 25, 2016

BREXIT, Yellen and the morning after pill

We would like to congratulate all bears who anticipated and  correctly predicted the Brexit. 
So where do we stand right now?
We believe that it will take the markets some time to digest recent developments(consolidation).After that, some more "panic" will ensue upon realization of the implications of Brexit. SPX will move fast towards 1875 around late July where Yellen will probably treat Markets with the morning after pill-->A rate cut!
At that point SPX will quickly move above 2000.

It will be an interesting summer.
So stay tuned and enjoy!   

Friday, June 24, 2016

Is BREXIT the SHTF moment for German equities(DAX)?Not quite yet...

Has Brexit just opened the pandora's box for German stocks(DAX)?Not quite yet.
Back in December 2015 we nailed the pathway of DAX for the following months(DAX: A Huge Head and Shoulders pattern is already forming).

Currently DAX is in a well defined downtrend since March 2015.However it is still above EMA200 and in a very long intact (so far) uptrend since 2003!

We estimate that DAX will soon break below the EMA200 ,initially towards  7700.
Let the dust settle down and be patient!

Wednesday, June 22, 2016

USDJPY ahead of British Referendum

Just hours before the British referendum we will like to show the implications of Brexit or Bremain on USDJPY

Bremain: A relief move towards around 113 is almost guaranteed

Brexit: A plunge towards 90-95 is definitely in the cards

Note that usually there is a positive correlation between USDJPY and US stocks.Since early 2016 this correlation was broken.We believe that during the current move the correlation will be reestablished which means that USDJPY and SPY will move in the same direction.
Currently there is some positive RSI divergence which favors Bremain.
In or out? Pick your poison...

Monday, June 20, 2016

Biotechhnology (IBB) : Brexit or not there is still potential for a further move lower

Biotechnology shares(IBB) had a huge rally from March 2009 to July 2015 with an astonishing performance of +570%!.


However since July last year IBB is in a clear downtrend and down around -35%.

Currently we favour a further move down towards 190-200 where it will probably signal at least a medium term bottom for Biotechnology.


Will Brexit ignite the anticipated move down?Sure it can.

If Bremain predominates then a relief move towards 270 is very possible.Again this will be a very critical decision level for IBB. Above this level the road towards 300 is clear, below it ,again, 190-200 is the target.

So, all eyes on British referendum ... 

Saturday, June 18, 2016

Long term Treasuries (TLT): Cup and handle? checked. Negative yields?.........

Finally long term treasuries (TLT) did what we have highlighted since early March(Treasuries (TLT): Double top or cup with handle?) and again a month ago(Treasuries Cup and Handle revisited).
TLT has just completed a cup and handle formation.

What's the next step?A confirmation of the recent breakout towards 132 and then up.Current TLT formation points towards higher bond prices (therefore negative lower yields) and has significant bearish implications for stock markets.

Friday, June 10, 2016

October may signal a trend change for Euro

Currently Euro is in a trading range within a downtrend.
Early October seems to be a key point  for EURUSD(U.S general elections?) If it manages to break above 1.16 then it will quickly move towards 1.24.If not then a move towards 1.06 is very possible.Below 1.06 next target will be 0.96
Our plan:

Wednesday, June 8, 2016

A quick update on gold

I have practically no time this week so just a quick update.Gold in the early stages of a bull market(Gold-SPX Ratio revisited:Another proof for Gold's bull case).Currently is moving within a trading range(Gold and GDX ready for a pause until year end).Taking a closer look we can see that gold is approaching resistance at 1255-1265 with negative RSI divergence .A move initially  towards 1235 is very possible.