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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

Dots

...If the dots don't connect, gather more dots until they do...or, just follow the $$$...

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IMPORTANT BLOG POST UPDATES...
* Trade Wars have escalated and now include diplomatic wars PLUS President Trump is cannibalizing prior U.S. market gains with his tariff tantrums against its world trading partners, while destabilizing a delicate world market balance

Tuesday, December 16, 2014

USD Versus Emerging Markets

The USD has been under accumulation since May of this year when it bounced around 3-year major support from late October 2013, as shown on the following Daily chart.

With daily whip-saw action that began in November, we've seen the RSI come off its highs, but remains above the 50.00 level. The MACD and Stochastics indicators have also been sliding. These are suggesting that we may see either a slowing in buying of USD, or a rotation into other world currencies.


Conversely, we've seen a great deal of weakness in Emerging Markets, as shown on the Daily chart below of EEM. Price has approached 3-year major support around the 37.00 level on increasing volumes, and all three indicators are down around the oversold levels, but have yet to signal that a reversal has begun.


The following ratio chart of the USD versus EEM shows that each time that the current level has been reached over the past 3 years, we've seen a subsequent decline in support for the USD and renewed buying in EEM.  All three indicators are up around the overbought levels, but have yet to signal that a reversal is imminent.


These three charts, and the extent of any upcoming near-term volatility in these two instruments, may be worth monitoring until the price of Oil stabilizes, and other world indices begin to strengthen...or not. It may be that we will see larger volatility ensue in currencies, before they play out to any great extent (or near-term trends become very clear) in world indices.