Category Archives: Blog

Classical Friday

 

 30 minute atr
 daily pivots
 weekly pivots
 upside retracements
 downside retracements
 regression channels
price support and resistance
On the economic calendar:-
08:30 Personal Income (Consensus 0.3% v Prior 0.4%)
          Consumer Spending (Consensus 0.2% v Prior 0.4%)
09:45 Chicago PMI (Consensus 56.4 v Prior 52.6)
09:55 Consumer Sentiment (Consensus 80.5 v Prior 79.2)
POMO:-
None today

Classical Thursday

 

 30 minute atr
 daily pivots
 weekly pivots
 some extensions
 downside retracements
 regression channels
price support and resistance
On the economic calendar:-
08:30 GDP (Consensus 4.0% v Prior 4.0%)
           Jobless Claims (Consensus 300 K v Prior 298 K)
           Corporate Profits
10:00 Pending Home Sales Index (Consensus 0.5% v Prior -1.1%)
10:30 EIA Natural Gas Report
11:00 Kansas City Fed Manufacturing Report (Consensus 9 v Prior 9)
          3 Month Bill Announcement
          6 Month Bill Announcement
13:00 7 Year Note Auction
15:00 Farm Prices
16:30 Fed Balance Sheet
          Money Supply
POMO:-
None today

Classical Wednesday

 30 minute atr
 daily pivots
 weekly pivots
 upside retracements
 downside retracements
 regression channels
price support and resistance
 
On the economic calendar:-
07:00 MBA Purchase Applications
10:30 EIA Petroleum Status Report
11:30 2 Year FRN Auction
13:00 5 Year Note Auction
POMO:-
10:15 – 11:00 Outright Treasury Coupon Purchases between $0.95 – $1.15 billion

 

Trouble with the Curve

Everyone continues to talk about when the Fed will “raise rates.” The interesting fact is that the market is unwilling or unable to raise rates despite the heavy Fed-timing focus. A few years ago, Europe came to the harsh conclusion that Greece (and then every other EU country) was not Germany. This led to a blow out in spread relationships and even chatter of countries opting out of the monetary alliance.

Today the German government term looks like this: 2 year -.03, 5 yr .18 and Bund .94. These rates have pushed peripheral Europe borrowing costs back down to historical lows. The Spanish 10 year is floating around 2.28, or 10bp UNDER the US. Thus, although a wide spread still exists between Germany and the “others” (we’re an “other” now) the rates are inordinately low and still falling.

So, why is the topic still, “When will the Fed raise – the anchor – rate?” Forward guidance has crafted a tight relationship between out years in Eurodollars. Flat curves are only visible inside the country. The new wides between the US and Germany indicate stress beyond the calibration of monetary policies. As we saw here in Napa, when the stress builds up, things begin to shake.

SPX Equal Point Move

SPX8-26-14

The S&P currently has rallied nearly the same point difference from the lows after the “1987 crash” @216.46, to the highs created in March 2000 @1552.87.

If you take the lows created March 2009 @666.79 known as the infamous “Haines Bottom” (after the late Mark Haines CNBC anchor), to create an equal leg we should get to “2003.20″ in the SPX.

“Elliotitians” would call that an “ABCD pattern.”

Today’s highs (at writing) is at 2002.33.

Blake Morrow

Chief Currency Strategist, Wizetrade