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 |
I know I keep saying this, but if this recent low in equities does turn out to be a pullback within the bull market that started late 2002, Bob Brinker will really deserve a lot of credit. He hasn't budged a bit over the last seven months in his recommendation to remain fully invested.
Today there were actually more new highs than new lows on the NYSE, and rates continued to improve confirming the technicals shown on Monday.
Today I filled out my trading account and the cash in my retirement account with a position in the SPX. 1340 looks like an important support level.
Ken Tower is a point & figure specialist, and I suspect he really likes the looks of this chart. I know I do. (Tower designed the point & figure charts for StockCharts.com).
I wonder if we will ever really know just how dire and close to collapse the financial system was last week. I'm still amazed when I see that the TBill rate went all the way down to .2%. That is an extreme in capital preservation, and if I were smarter, maybe I would have recognized it as a signal that the bottom was in. The prudent course, though, was to wait for the rate to bounce back up signaling an ease in the emotions. Nobody knows for sure if we've seen the bottom of the credit crisis, but we can use this rate to help us monitor the situation.
Above is the broader view of the TBill rate. The current crisis had people more concerned than the dotcom collapse and the Sep-11 attacks.
Top quality corporate bonds are now bouncing back as well, although there is still a way to go before the ratio is back to its normal level. The recent sell off in the 10-year also indicates easing in the crisis. Money coming out of bonds is likely to benefit stocks since commodities are now out of favor, at least for awhile.
The US Dollar is widely followed at the moment, but perhaps what people aren't paying attention to is the fact that the bounce in the dollar may be benefiting the US stock market versus other markets. Let's see if the US /World equity ratio can hold above the moving average.
Good job and thanks for sharing your observations (Comment this)