Always consider hidden risks
Desloges CFA is a professional investment consultant/ blogger/ trader
with over 25 years of experience working on the buy and sell-side. I
have researched and invested in traditional and alternative asset classes and
worked at Pensions Funds, International Banks and Dealers. More...
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Insight Will publish on an irregular basis next 2 weeks. Will be more active on Twitter. October 27 Russell 2000 (TWOK ETF): Critical Test for Bulls? It is now testing the Support Trendline from a steep Rising Wedge so Critical for Bulls to protect at all costs. Canadian Bonds ETF XBB: Near Support? But the most interesting technical factor is that we tested for a fourth time the Weekly Support of that Major Wedge Pattern (that started back since November 2015) Small Stocks Threaten Breakdown – Can They Hang On? The Russell 2000 Small-Cap Index has violated (for now) the 2 key uptrend lines that we recently identified. Is the Fed Fix in for the Election? Is history's calmest stock market in the midst of all that a sign of peak complacency or irrationality? China capital flight flashes warning as authorities forced to prick property bubble The risks of China's debt addiction are spelled out in the International Monetary Fund's Global Financial Stability Report. With QE Near Dead, It’s More And More Pretzel Time Central banks assume that means they have to “stimulate” more when in fact it is just their math telling them they haven’t stimulated at all – at least not where it counts and has been needed.
October 26 Financial Sector (XLF) : Price Compression? Next break of that Wedge will be significant for the whole market... US Dollar Index/SP500: A Risky Mix? Foreigners will dictate the trend for the SP500 in the next few trading sessions, especially with month end quite near... Fund Managers' Current Asset Allocation - October Allocations to US equities had been near 8-year lows over the past year and half, during which the US outperformed most of the world. After rising for two months during the summer, allocations fell again to underweight in both September and October. Bearish sentiment remains a tailwind for US equities Are Japanese Equities Ready To Rise Again? After successful tests of its broken multi-decade downtrend, Japan’s Nikkei 225 has a chance to commence a new upleg End Of The Bond Bull – Better Hope Not The irrationality of market participants, combined with globally accommodative central bankers, continue to push asset values higher and concentrate investors into the ongoing “chase for yield.” There isn’t much guessing on how this will end, history tells us that such things rarely end well. Why Aren’t Global Markets Freaking Out Over China’s Currency? Market forces, which Chinese officials have pledged to embrace, appear to be pushing the yuan down faster. Chinese intervention is to smooth out and make more orderly the yuan's decline. October 25 Nasdaq 100 Index ETF QQQ: At Technical Crossroads? But few of us realize the outperformance of the Nasdaq 100 Index (QQQ ETF) compare to the Mighty SP500 Index (SPY ETF) on a relative basis since June 24 SP TSX60 Index (XIU ETF): At the Resistance Zone? We are into a Daily Rising Wedge Technical Pattern on the XIU ETF since June 27 2016 and now testing a Major Resistance Trendline from that Wedge that started on October 9 2015. Last five trading days of Election Year October’s modestly bullish The last five trading days are modestly bullish, up 56.3% of the time since 1952 with an average gain of 1.1%. The Undercurrent of Currency Issues We think the Fed should raise the fed funds rate again relatively soon, but there will be consequences for doing so. A stronger dollar and lower than expected earnings growth would likely be among them. C anada’s record household debt is threatening its financial stability, global bankers fear The combined debt of Canadian governments, companies and households reached US$4.4 trillion in the first quarter, or 288 per cent of gross domestic product, exceeding the same gauge for the U.S., the U.K. and Italy, according to the Bank for International Settlements. October 24 US Technical Charts Potpourri Very atypical Markets; US $ up, oil up, US stocks and bonds slightly up. High beta stocks outperforming and small cap stocks under pressure... Canadian Technical Charts Potpourri Financials and the Energy sector are 60.3% of the XIU ETF... Trillion-Dollar Payout May Mean Peak Largesse for U.S. Investors “Indeed, free cash flows, which are less vulnerable to accounting wizardry than earnings, have begun to contract.”
S&P 500 on track to complete 3-month losing streak With six trading days left in October, S&P 500 needs to climb back above 2168.27 to avoid a third negative month. Remembering The Impetus Of “Irrational Exuberance” As We Approach Its 20th Anniversary Rather than give a boost to the broad economy, however, these central bankers have only accomplished an even greater and more pervasive financial asset perversion. TED’s A Witch Global “dollar” illiquidity or even a shortage is a slap in the face of central bankers and economists, a complete contradiction to what is still believed by many of what QE was October 17 US Technical Charts Potpourri Very atypical Markets; US $ up, oil up, gold down and US stocks and bonds down.... Canadian Technical Charts Potpourri XIU ETF (iShares S&P/TSX 60 Index ETF) on a Weekly Relative Basis compare to the Mighty SP500 Index (SPY ETF), few of us realize that the Canadian Index started to outperformed slightly since bottoming out in December 2015! October 11 SP500 SKEW Index: Complacency Zone? We keep getting into Steady and Puzzled Markets, a kind of uncharted territory... SP500 Full Risk On Behavior? That Risk Taking behavior is at the highest level since November 2015. Spotless Indicator Signaling “BTD”?…Or Has Its Luck Run Out? This ratio has a flawless track record of bottom-picking the S&P 500 since 2009; is it signaling another “buy the dip”, or breaking its 7-year run? October Macro Update: Solid Wage Growth But Housing Construction Flattening The macro data from the past month continues to mostly point to positive growth. Bubble Blind Central Bankers For th e first time in the history of economics, corporations and governments are getting paid to lend money. Is the Bond Market in a Bubble? Two experts square off on one of the crucial issues facing investors today October 6 Dividend Yield Chasers on Shaky Ground? We are again into another wave of yield chasing as investors takes more and more risks to achieve less and less financial ret urn. Regardless of election outcome, S&P 500 advances 72.2% of the time They All Have One Thing In Common Al l of the great investors, have one thing in common- their ability to clearly communicate their philosophy. Doubling Down Central bankers cannot continue to double down bets without risking a “black”or perhaps “grey” swan moment in global financial markets.
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