Wednesday, October 28, 2009

Bullish Stock Market Indicators

Our overbought/oversold stock market indicators went from neutral to bullish. Our long-term indicators are also bullish. No indicator is infallible -- but we make special note of these trading signals -- especially at this "scary" junction in the stock market.

We'll look to Short-term market direction to help us size our position -- especially after this morning's early "gap fade" (long bias since market opened lower) tendency dies down.

Thursday, October 22, 2009

A Look at the Currencies, Stock Indicators

Our overbought/oversold stock market indicators are going neutral after being slightly bearish for a few weeks. Depending on market action, they are looking to go long in a day -- or a few days. Our long-term indicators remain bullish, while our short-term indicators are getting a headache from the flippant stock market. Net-net, as you can tell, we have been slightly bullish, riding the general trend upwards in the equity markets.

Today, the US dollar is taking a breather from its recent steady decline. Most foreign currencies have been gaining ground relative to the US dollar. In particular, high-yielding currencies like the Canadian $ and Australian $ have made big gains. Many markets are now discounting the risk in the general global economy. Only time will tell how things shake out -- but for now, sell the US dollar on dips (and buy all foreign currencies on dips).

Wednesday, October 7, 2009

Stock Indicators; Also: Correlated Markets

Our oversold/overbought indicators remain bullish. In addition, our short-term and long-term indicators are bullish. This caused us a little pain last week when the market declined, but we're riding this upward leg right now...

Correlated Markets
Recently, we mentioned how many markets had started to move together as stocks continued to move straight up from the March lows. Most commodities were generally moving higher (including energy, metals, grains, softs) as were risk-related / high-interest currencies such as the Aussie and Canadian Dollars.

When markets become correlated, traders must be careful and monitor their overall portfolio risk. Last week's markets were a wake-up call as currencies, gold and other markets followed the stock market's lead downwards.