AlphaKing

ETF Market Trends: Resurgent Dollar Prevails Once Again Over Riskier Assets

Market conditions this past week imply that the conviction of the bulls and the strength of the market rally continue to be in question. This pullback of last week has created more mixed feelings about the rally and if the bulls are running out of steam, or if this is a brief period of consolidation before another push higher. Currently, mid to long-term pressure still seems to be on the upside.

Winmill: Don't Be Surprised By $2,400/oz Gold

Don't be surprised by 2,400/oz gold...but do not be even more surprised to see a large pullback from the current levels.

Today in Commodities: Expensive Game of Chicken

Although precious metals and other base metals continued to show strong upward momentum this past week, rallies in other commodities began to lose steam and correlation has been dropping. We believe this condition is because investors' risk appetite is declining, and increasing amount of uncertainty as recent macroeconomic data displayed a mixed picture on global economic conditions. Also, technically many commodities are overbought and at sentiment extremes.

Is Another October Surprise in the Works?

I am still standing by this scenario developing and a much larger market correction lower if the support levels do not hold, although the support levels have of course moved up.

The support levels below that were mentioned as 9300-9350 are now at 9650 level. A solid break below that level should bring the markets close to 6-8% lower. Today it seems as if they are trying to test those suppor levels. For all trend followers now may be a good time to enter long, or add to your position.


On Oct 03 12:41 AM AlphaKing wrote:

> Here we are now 3% lower than where I gave a warning signal up at
> 9850. As suggested in my initial warning comment I believe we still
> have at least another 1-2% move lower in the short-term, and then
> there is some strong support. If we get a break below 9300-9350 level
> it should confirm an even stronger move lower, which is moderately
> likely due to the bearish pattern formation with which a solid break
> below 9300 would confirm. Confirmation of a trend line break should
> then bring at least another 5% drop, but I believe closer to 12-15%
> fall technically from there in the medium term.

Iran's Influence on Oil Price a Non-Issue for Now

The Dollar took a slight hit on the news of the UAE's request for stopping dollar denominated oil trades. This desire of theirs in turn gave oil a little boost. However, this news should add no real pressures to oil in the medium to longer term, because it is not a viable move, and would not be a smart move especially with the prospects for the dollar growing weaker everyday.

Was that October First, or April Fool's Day?

Here we are now 3% lower than where I gave a warning signal up at 9850. As suggested in my initial warning comment I believe we still have at least another 1-2% move lower in the short-term, and then there is some strong support. If we get a break below 9300-9350 level it should confirm an even stronger move lower, which is moderately likely due to the bearish pattern formation with which a solid break below 9300 would confirm. Confirmation of a trend line break should then bring at least another 5% drop, but I believe closer to 12-15% fall technically from there in the medium term.

Is Another October Surprise in the Works?

Market corrections in Fall months are just part of the cyclical nature of the markets. Similiar to the longer-term cyclicality of the markets tending to have corrections during the beginning or end of a decade. There really is not one reason for why the downcycle tends to be around this time, but a multitude of them.

Is Another October Surprise in the Works?

Here we are now 3% lower than where I gave a warning signal up at 9850. As suggested in my initial warning comment I believe we still have at least another 1-2% move lower in the short-term, and then there is some strong support. If we get a break below 9300-9350 level it should confirm an even stronger move lower, which is moderately likely due to the bearish pattern formation with which a solid break below 9300 would confirm. Confirmation of a trend line break should then bring at least another 5% drop, but I believe closer to 12-15% fall technically from there in the medium term.

Closing Update for Friday, Oct. 2: Jobs Data Weighs Markets Down

Here we are now 3% lower than where I gave a warning signal up at 9850. As suggested in my initial warning comment I believe we still have at least another 1-2% move lower in the short-term, and then there is some strong support. If we get a break below 9300-9350 level it should confirm an even stronger move lower, which is moderately likely due to the bearish pattern formation with which a solid break below 9300 would confirm. Confirmation of a trend line break should then bring at least another 5% drop, but I believe closer to 12-15% fall technically from there in the medium term.

S&P 500 10-Day A/D Line Makes First Lower Low Since July

Here we are now 3% lower than where I gave a warning signal up at 9850. As suggested in my initial warning comment I believe we still have at least another 1-2% move lower in the short term, then there is some strong support. If we get a break below 9300 level, which is moderately likely due to the bearish pattern formation with which a solid break below 9300 would confirm. Confirmation should then bring at least another 5% drop, but I believe closer to 12-15% fall from there in the medium term.

How Are You Liking October So Far?

Here we are now 3% lower than where I gave a warning signal up at 9850. As suggested in my initial warning comment I believe we still have at least another 1-2% move lower in the short term, then there is some strong support. If we get a break below 9300 level, which is moderately likely due to the bearish pattern formation with which a solid break below 9300 would confirm. Confirmation should then bring at least another 5% drop, but I believe closer to 12-15% fall from there in the medium term.

Closing Update for Thursday, Oct. 1: Dow's Big Plunge

Here we are now 3% lower than where I gave a warning signal up at 9850. As suggested in my initial warning comment I believe we still have at least another 1-2% move lower in the short term, then there is some strong support. If we get a break below 9300 level, which is moderately likely due to the bearish pattern formation with which a solid break below 9300 would confirm. Confirmation should then bring at least another 5% drop, but I believe closer to 12-15% fall from there in the medium term.

Economists and the Fed Differ

My comment above is now being enforced. Reinforced by the fact that since Wednesday FOMC statement, in which they said all positive things about the economy, the market is now dropping. The market diverged from the news on Wednesday and as I said it would have been a good time to take a little off the table Wednesday as we are now down about 2% in the dow. Although it is not much, I see this retracement continuing for at least a couple more percent.

There Are No Good Choices for the Fed

The recent FOMC statement proves my previous comment on this post. They are sounding too laxed, and more dovish than they need to be. A little hawkishness at the moment would be a positive thing, signaling they have greater faith in short term economic recovery and are prepared for inflation. Instead, they will continue to monetize debt and let inflationary pressures build up greater than needed. This is now worrying investors as they are afraid they will "drop the ball" too quickly, and may be a little late in raising rates as they usually are.

Hedge Fund Strategies: Global Macro vs. Market Neutral

Well market neutral funds should be expected to react less and be less dependant upon liquidity. Market neutral funds are most often hedged more than their global macro counterparts, so a drop in liquidity has less of an effect. Being that market neutral funds are often hedged with more diverse and non- correlated assets they have less basis risk and spread fluctuations, up or down, do not have the same effect on them as global macro funds. Beta for market neutral funds arises from their well-hedged positions and not from broad market movements. When liquidity drops on a broad market basis market mispricing and hedged spreads tend to do better because the mispricing typically will arise from excess and extreme liquidity.