Monday, November 26, 2007

Tuesday Interest Rates & the US Dollar

Disclaimer: All charts and comments are intended for education and discussion purposes only. No investment recommendations are being offered. Please do your own research and take responsibility for all investment decisions that you make. Questions and comments related to this post are encouraged.  | MON - Sector Strength | TUE - Interest Rates | WED - Market Breadth | THU - Commodities & Currencies | FRI - Market Sentiment | SAT - Bullish Percents | About | contact: HeadlineCharts@gmail.com |


Rates have shifted dramatically lower which is not what we want to see.  Fixed income prices are surging and rates are collapsing.  Money is flowing out of equities and moving into the safety of Treasuries of all durations.  Fed Funds are almost certain to follow the yield curve lower despite the low US Dollar.



The weakness of the US Dollar continues to amaze.  But rates will probably be coming down around the world which will probably support at least a bounce in the US Dollar. 



The broker /dealers don't look like they are ready to lead this market higher anytime soon.  But the pullback in prices is to an important support level, and the indicators are oversold which means we may get some relief from the relentless selling.  There isn't much support below though if this index breaks down.
Posted by HeadlineCharts at 19:51:43 | Permanent Link | Comments (2) |
Comments
1 - I follow a number of breadth indicators, and all of them are pointing to a market bottom. However, the only indicator that's making me nervous is the put/call ratio 20-day moving average. It isn't as high as it was back in August when that bottom was set.

http://www.indexindicators.com/charts/sp500-vs-put-call-ratio-total-20d-sma-range-3years/

Maybe we'll get a short-lived rally followed by a big(ish) decline, which will set the bottom for the next few months. (Comment this)

Written by: VisualTrader at 2007/11/27 - 11:08:44
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2 - Hi, thanks for the note. I agree that a number of breadth indicators are starting to look good... except for the NYSE new highs /new lows. The number of new lows needs to settle down to the 50-60 range or below. I agree the put/call is curious. You would think there would be a lot of put buying out there and this is another worry. I guess a lot of investors like us are looking for the oversold bounce which means you might be right about the next rally being short-lived and leading to another decline. I'm also worried about the ECRI leading index. It continues to decline and the ECRI is getting very close to calling a recession. (Comment this)

Written by: HeadlineCharts at 2007/11/27 - 20:28:41
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