Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

“Markets Have A Mind Of Their Own” But One Trader Warns “Nothing Lasts Forever”

Courtesy of ZeroHedge. View original post here.

Despite new record highs in stocks, Bloomberg’s former FX trader Richard Breslow fears other markets (the dollar’s downfall, collapsing rates/curves, crashing commodities) have become too “fatalistic” amid the summer doldrums.

Via Bloomberg,

Let’s start with some of the things we know with certainty. Yield curves will keep on flattening. Probably invert and drive home the point to everyone that the Fed committed a dreadful policy mistake. The dollar will never rally again. Just look at the numbers and you have to be a U.S. bear. And look how efficiently the latest European bank bailouts were handled this weekend. They really have their act together. Oil? It’s going to single digits, of course. And there’s nothing you can do to stop it or the carnage it will cause in places like Norway and Canada.

It’s summer, markets have a mind of their own and there’s no percentage in fighting the tape.

In fact it’s odd how fatalistic people seem to be. We used to furiously debate where and when we’d find the canary in the coal mine warning of an imminent market reversal to pounce on. Now, there seems to be blanket resignation that the trend is your master.

But if there’s one thing we do know from experience, it’s that all of these things are capable of turning on a dime. And we need to keep watching for signs of the sine wave shifting.

This coming Friday we’ll get some inflation (or lack thereof) numbers out of Europe and the U.S. For the moment, price data is the most important economic releases we get and have the greatest potential to provoke a reaction. Tame outcomes seem to be the clear base case. Which makes them even more important.

Traders may, at their peril, ignore the message being sent by Chair Yellen when she speaks tomorrow, but the latest HICP and PCE data will speak for themselves. It looks and feels like the Treasury 2s10s is trying to form a base near the 80 basis point level. Where we end the week around this pivot could be important.

Data misses and a Washington horror show have contributed to a really negative vibe surrounding the dollar. The only problem, is that in the last month, the dollar index hasn’t gone anywhere and has spent the past week on the top side of the 21-day moving average. The index, currently near 97.40, will look quite good if it manages a move over 98 and horrid below 96.30.

Oil has more written about it signifying little than any other asset. Why it moves and how far is too often a mere random walk. Its price figures into every econometric forecast and yet no one can credibly predict its movements. We’re six months into the year and WTI has already had five big moves. Extrapolation is a bad idea. For all its whipping around, however, the charts will tell very different stories below $42 and above $44.50.

Most interestingly, Breslow concludes by noting the likes of Mexico, Norway and Canada have taken this “collapse” in oil prices very much in stride, to say the least.

Something the market has given far too little attention to. Or maybe they realize that nothing is forever.


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!