Archive for the financial instrument Category

Trouble ahead, trouble behind…

Posted in technical analysis, USD on 2011-10-01 by Strategesis

US Dollar Index | Monthly Bars

(Click on chart for larger view)

The chart speaks for itself, if you know how to read it: Significant upswing in the US Dollar index has probably started, based on a) the break of the downward trend channel line, b) the upsurge in momentum as measured by my proprietary technical indicators, and c) the oversold condition of the market.

However, the overall trend in the USD is still down. Also, technical analysis only provides the relative odds, and does not forecast the future with certainty. Nothing can do that. So believe what you see, and take to heart the fundamental principle of market analysis: Trends can and do reverse, but at any given moment, a trend is far more likely to continue than to reverse.

That being said, the history over the past decade or so is that whenever the USD rises on the scale of monthly price bars (by more than the usual meaningless fluctuations,) world markets and economies fall.


AAPL surges higher, closes above $411

Posted in AAPL, events, stocks on 2011-09-19 by Strategesis

AAPL | Monthly Bars | Mid-1990s to present

(Click on image for larger view)

Trees don’t grow to the sky, but the trend is strongly up. It could easily continue for months yet before any sort of significant downmove.

So much for the idea that AAPL would crash on the departure of Steve Jobs from the CEO post. Moral of the story: Don’t predict how the market will react to news. Let the market tell you what it thinks the news means. It’s always right….

The USD has formed a bottom of some significance. How long will the bottom hold?

Posted in technical analysis, USD on 2011-05-14 by Strategesis

From (by Toby Connor):

Despite my bias to see new all time lows in the dollar index, I think the dollar probably put in the three year cycle low last week. Sentiment at the time had reached multi-year lows and as of yesterday the dollar had moved back above the 50 day moving average.

If I’m right then this should usher in the next deflationary period just like the rally out of the ’08 three year cycle low signaled a coming recession, the next leg down for stocks in the ongoing secular bear market, and a collapse of the CRB into its 3 year cycle low.


Beyond The VIX

Posted in education, options, technical indicator on 2011-04-20 by Strategesis


More importantly notice the two green boxes. The first is the flash crash of 2010. Notice how the VIX makes new lows while the Skew index makes new highs. Then once the market place reacts to falling asset prices, the VIX rises while the Skew Index falls. Now look at the next green box. The same exact divergence is occurring. Last month’s selloff is even reflected.