Angelo Airaghi

Short-term horizon, currencies, momentum, long/short equity
Angelo Airaghi
Short-term horizon, currencies, momentum, long/short equity
Contributor since: 2008
Company: ProfitsOn
Good article.
US Dollar: A rate hike cycle has been largely discounted in current prices. The US dollar index could decline to 94/92.
Yes, it might be looking to bottom out at these levels. Various technical indicators point in that direction. A rebound to 1960/2110 is possible over the coming months.
Yes, a small increase will not change anything. A prolonged cycle of increases will.
Yes, chances are 50/50 at the moment for a rate hike.
Thank you.
Thanks for all the comments.
Good point. Accordingly to long-term cycles, the EUR/USD could target the highs again. Then, the US dollar has the potentiality to increase for 5/7 years.
Yes, deflation could be a challenge. Thank you for the article’s idea.
Until the huge deficit is reduced, the US dollar could increase short-term, but then decline again.
Momentum does not seem to pick-up and unemployment could bottom next year.
Yes, as strong resistance at 1720/40 for the S&P 500 index.
Thank you.
S&P 500 index, mId-Sep, RSI
He could change the economy around.
The US bond boom, like all other booms, will bust. The question is: “When will it do it?”
Thank you for your comment.
In January the German jobless rate declined to 6.8%, the lowest level in 20 years. Unemployment fell for the second straight month with the job market seeing the biggest fall in a year. ECB is willing to buy “unlimited bonds”, if necessary. It should not be the case. European yields are falling and money is returning to the peripheral countries. Financial institutions have already repaid 141 billion euro of the 489 billion euro received from the first LTRO. Core problems have not been resolved, but the worst is over for now.
The Italian elections have produced some surprises and a market correction is possible over the short-term. However, the longer-term trend stays positive for the European currency. In the past 40 years, eur/usd trends have lasted for 20/30% from the bottom, which in this case is 1.20.
In the US, housing has bottomed and should find new highs within 3/5 years from the lows (2010), if history repeats itself. Then, a vast majority of the S&P 500 companies have exceeded consensus estimates. Overall, growth is more than 5.0%, compared to 1.4% in the third quarter of 2012.
Signs of employment acceleration are growing. In January, the ISM employment indexes reported 57.1%, the highest level since 2006 when the private sector was producing more than 200,000 positions a month. Job expansion should enhance household confidence and improve consumption.
The unemployment rates can decline toward 7.0% and then rise again for the final top. Since 1948, the unemployment rate had two bullish cycles (1952/61, 1969/1982). Movements lasted for 9/13 years and extended 63%/67% top/bottom. They all climbed in three distinct waves before collapsing. Declines prior to the final wave-up have continued for four (1975-1979) and two (1958-1960). Unemployment started in 2000. It topped in 2003, bottomed in 2007 and completed the second wave in 2009. A third and final wave is still missing. It could be expected between 2013/2014, if history repeats itself.
Apparently, the uptrend is intact for now.
Bond prices are correcting and the decline could last for 3/6 months.
Yes, S&P 500 could target 1500 and US dollar index might fall to 78/76 this year.
It should.
Risks are still there, but the worst should be over for Europe.
The ECB will buy unlimited bonds, if necessary.
EURUSD lost only 20% when the eurozone was about to break apart. It should result in low growth/high inflation numbers.
Why GB should leave the E.U.?
The U.S. dollar should remain weak until the huge deficit is reduced.
Then, it can uptrend again for 5-7 years, if history repeats itself.
Yes, the S&P 500 index is targeting 1460/1500.
Past performance is not a guarantee of future results.
However, housing is just bottoming out. Since 1969, new highs were reached after 3/5 years from the bottom (2010?).
Bull moves have then lasted for about 10 years (1964/1974, 1980/1989) and have extended for 55%/60% top/bottom.
I see..
At 1490, there is another good resistance. However, in the past, January has been another very good month for stocks.
Thank you for the links.
Hargis, do you have a link to the charts?
Yes, risks are there. The bear market that started in 2000 is still on. It might last between 13 and 17 years, if history repeats its course.
However, the European crisis is discounted for now. There is hope a solution will be founded soon in the US.
Thank you, Gel.
It depends on what?
Yes.
The US dollar should trend lower against majors, until commodity prices will trend higher.
Thank you for your comment.
Nov. EURUSD short 54% and GBPUSD short 63%.
Thank you.
The U.S. dollar should decline further during medium-term. Against the euro, 1.44 and 1.55 are two possible targets.
However, longer-term, once the huge deficit is reduced, the U.S. dollar could rise 40%-60% from the lows, if history repeats itself.
It could be linked to a top in commodity prices. It happened in 1980 and 1995.
Things are moving again, albeit at a slow pace and below the surface. US layoffs reached a low of almost two years’ duration. Private sector hiring is increasing led by small and medium companies. However, the economy remains fragile.
In the past, it took 3/5 years from the bottom for housing prices to reach new highs again. The average started the bottom out in 2009/10
We are still inside the bearish economic cycle that started in 2000. During the past 100 years, consolidations lasted for 13/17 years.
Inflation will increase again.
Housing is bottoming. However, it might take few years for prices to reach new highs.
Yes, markets discounted bad news and hoped for the best.
However, details are now expected.