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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...
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* 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.
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ECONOMIC EVENTS

 UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...

***2024***
* Wed. June 12 @ 2:00 pm ET - FOMC Rate Announcement + Forecasts and @ 2:30 pm ET - Fed Chair Press Conference
* Wed. July 31 @ 2:00 pm ET - FOMC Rate Announcement + Forecasts and @ 2:30 pm ET - Fed Chair Press Conference
* Wed. Sept. 18 @ 2:00 pm ET - FOMC Rate Announcement + Forecasts and @ 2:30 pm ET - Fed Chair Press Conference
* Thurs. Nov. 7 @ 2:00 pm ET - FOMC Rate Announcement + Forecasts and @ 2:30 pm ET - Fed Chair Press Conference
* Wed. Dec. 18 @ 2:00 pm ET - FOMC Rate Announcement + Forecasts and @ 2:30 pm ET - Fed Chair Press Conference

*** CLICK HERE for link to Economic Calendars for all upcoming events.

Friday, March 31, 2023

SPX: Mired In Volatile 'Chaos Zone'

It's plain to see that the SPX is firmly stuck in between 3750 and 4200 (a very volatile, whippy 'Chaos Zone') as noted on the following daily chart.

It's had difficulty gaining sustained momentum to hold onto gains made above 3750 and steadily increase its value, convincingly, since January of 2021.

A breakout and hold above 4200 could see a retest of its prior high of 4818.62 (hit on January 4, 2022).

Otherwise, a break and hold below 3750 could see a retest of 3500, or lower, to around 3000.

N.B. Unless absolute proof is produced to investors and traders that the entire U.S. banking system is safe and secure, including Regional banks, any breakout above 4200 could be considered shaky and short-lived...especially with inflation still near 40-year highs, the U.S. Fed still raising interest rates, and a recession looming this year (or, more likely, stagflation).


Tuesday, March 21, 2023

KBW Bank Index Looks Shaky

As the U.S. Fed and Treasury Secretary try to assure Americans and the global investment community that their banking industry is secure, the price action on the following monthly comparison chart of the KBW Bank Index (BKX) with the KRE Regional Banking ETF depicts shakiness and incredible weakness, especially during the month of March.

Several regional banks within the KRE ETF have failed, so far, as described in my recent posts here and here. No doubt, we'll see more.

BKX has had great difficulty, since the 2008/09 Financial Crisis, gaining sustained momentum to hold onto gains made above 80.00, and to steadily increase its value...convincingly.

In fact, its current price of 83.65 is considerably lower than that set at its high, immediately preceding the Financial Crisis (121.16 in February 2007). 

Furthermore, it plunged below 121.16 in April 2022 and has been trading lower, ever since...so, it's been weak for a year, now...as has KRE.

Longer-term major support sits at 60.00.

A break and hold below 80.00 could see a retest of 60.00, or lower, in short order.

Sellers are currently in charge of this index, as well as KRE, on this timeframe.

Keep an eye on these two for reaction (immediate and longer-term) to the upcoming FOMC interest rate announcement and Fed Chairman press conference on Wednesday.



Thursday, March 16, 2023

First Republic Bank Joins Other U.S. Bank Failures

First Republic Bank (FRC) is the latest bank failure in the U.S. It follows bank weakness that's been exposed in the U.S. and Europe the past few days, as outlined in my posts here and here.

It seems that "top executives at the bank sold millions of dollars of company stock in the last two months (averaging just below $130 a share)...but did not report the sales to the SEC."

FRC made a high of 222.86 in November of 2021, before dropping over the ensuing months, and finally plummeting this month.

Today, it gapped down on the open and hit a low of 17.53 before bouncing a bit, so far, as shown on the following monthly chart.

The following ZeroHedge article provides details involved in its demise.

What more can I say? The banking and financial fallout continues -- not just in the U.S. -- as there are cracks and fragilities in the financial system globally.

But, I do have one question...Why would other financial or government institutions waste money by propping up bad banks, rather than concentrating on shoring up those that still have sound financial and fiscal security principles, as well as fiduciary and moral responsibilities, as their primary goal for their customers and investors? 👀

By the waySilicon Valley BankSignature BankSilvergate Bank and First Republic Bank are NOT on the G20's list of 29 Banks Deemed Too Big To Fail. So, why are they getting "bailed out?"


* UPDATE April 25...

The deposit outflow carnage continues as FRC is now trading at record lows, below its December 2010 IPO price of $27.25...looks like the $30 Billion infusion from other banks was a bust...



* UPDATE April 26...

FRC still dropping...like a rock...down 97%+ from November 2021 highs...

HOW CAN BANKS GET IT SO WRONG...AGAIN (POST-2008/09 FINANCIAL CRISIS)???

* UPDATE April 28...

FRC is still falling off a cliff and on its way to zero...reports are that the FDIC may step in and place it into receivership imminently.

So, what will happen to the top executives who sold millions of dollars of shares without reporting it to the SEC, as mentioned at the top of my post?


* UPDATE May 1...

FRC has been scooped up by JP Morgan Bank from the FDIC.

Is this the beginning of the end of smaller community and regional banks across America?

If so, what does that mean for small and local businesses? Will they still be around in 5 or 10 years?


Wednesday, March 15, 2023

CREDIT SUISSE BANK: From Bad To Worse

My post of November 4, 2011 contained a list of 29 banks that were deemed "Too Big To Fail" by the Financial Stability Board of the G20.

One of those banks was Switzerland's Credit Suisse Bank (CS). Another was Germany's Deutsche Bank (DB).

I last wrote about both of these banks in my post of October 3, 2022.

Their movements were identical from September 2001, and both were trading at or near their lifetimes lows...just above zero. They had never recovered from the fall from their lifetimes highs set in April 2007...right before the 2008/09 financial crisis.

My article contained a lot of information detailing their weaknesses, which were reflective of their credit risk in the face of an impending global recession.

Today, Credit Suisse is back in the news, as it has made a new lifetime low of 1.78, so far, today. Deutsche Bank also gapped down to a low of 10.06, thus far. Sellers are still firmly in control of CS, and have been for most of the time since its high of 73.01 made in April 2007, as shown on the following monthly comparison chart.

U.S. and European markets are down considerably today, on this news.


(World Markets at 2:15 pm ET)

The following ZeroHedge articles detail the issues facing, not only Credit Suisse, but "the entire European banking sector (stock and credit) [which] is cratering," at the moment.


ZeroHedge excerpt

ZeroHedge excerpt

ZeroHedge excerpt


ZeroHedge excerpt

So, will we see a bank bailout from the Swiss National Bank (Swiss Central Bank), or other entity...for CS and any other distressed European banks?

By the way, regardless of whether CS is bailed out, there's a reason why it's plunged to almost zero in value...and, I doubt whether throwing more money at it will change its trajectory, or merit, as a viable and trustworthy bank, in the long term.

Will that contagion spread to American banks, some of which are already collapsing, as detailed in my last post?

Why is reckless behaviour by bank executives continuously rewarded with bailouts by Central Bankers and governments around the world, at the expense of taxpayers...with no consequences?

N.B. On a related note, I compared the charts and price action of Germany's DAX with the EUFN (Europe's MSCI Financials ETF) several times last year, here (March 7, 2022) and here (July 16, 2022).

I warned of a strong divergence between the DAX and the EUFN in my March 7 post. I noted that, while the DAX had been in a long-term uptrend, the EUFN had been in a volatile and whippy general downtrend. It was a warning of weakness for the DAX (and the EUFN, as well as other European indices). Both plunged a great deal from then, until they bottomed in October, as shown on the following monthly comparison chart.

They've both rallied since then, but have come to a screeching halt and have reversed course this month. In fact, the EUFN has plummeted far worse than the DAX, so far. The Sellers are firmly in charge of EUFN.

If the EUFN continues to outpace the DAX on further downside movement, it's a signal that the DAX may follow soon, thereafter...both worth monitoring over the coming weeks and months, in addition to CS and DB.

* UPDATE March 18...

A takeover deal may be imminent, whereby UBS Group AG (UBS) acquires all or part of Credit Suisse...we'll see what happens...


Price action on the following monthly chart of UBS depicts the fact that this investment bank has never recovered from the negative fallout of the 2008/09 Financial Crisis

It's been trading in a sideways range between 10.00 and 23.00, since it bottomed in March of 2009..quite the switch from its record high of 66.26 set in April 2007.

The Balance of Power is currently in the hands of Sellers.

A break and hold above 23.00 could inspire confidence in this bank, if it did acquire CS, and entice new shareholders to place their bets accordingly.

However a break and hold below 10.00 could see this bank enter crisis territory and flop, as well.

One to watch over the coming days/weeks.

* UPDATE March 19...

The following ZeroHedge article provides further updates on the negotiations between UBS and CS...it seems a deal has been reached.

If the Swiss National Bank is prepared to assist in this acquisition with a sizeable monetary contribution, this must be a very dire situation, indeed!

Will this end in a nationalization of banks in Switzerland -- and, perhaps in other countries -- at some point...and end capitalism, as we know it?

* UPDATE March 20...

Swiss (and European) bond holders are not happy with the deal involving CS, UBS and the Swiss National Bank...

Swiss and European banks look weak, as shown on the monthly comparison chart of CS, UBS, DB and EUFN (European Financial ETF).

In fact, keep an eye on DB for signs of further weakness, as it struggles with problems associated with its CDS (credit-default swaps)...


Sunday, March 12, 2023

Silicon Valley Bank's Parabolic Rise & Plunge

I initially warned about U.S. bank bubbles bursting on April 10, 2021. My follow-up to that was written on October 15, 2022, which included detailed information on BlackRock Inc.'s (BLK) parabolic plunge.



Since then, we've seen another bank's demise unfold, namely, Silicon Valley Bank (SIVB)...the 16th largest bank in the U.S., and the largest bank by deposits in Silicon Valley.

It's interesting to note how closely SIVB mirrored the movements of Bitcoin, COINFNGU (10 Tech FAANG+ stocks ETF) and BLK, as shown on the following monthly comparison chart. They all rose and fell on parabolic movements...indicating a lack of investor confidence in their ability to retain any long-lasting sustainable value.

Their price action has, essentially, moved in lock-step with the S&P Regional Banking ETF (KRE).

Keep an eye on these in the coming weeks, inasmuch as a collapse in SIVB may trigger a contagion to other banks, including KRE, as well as FNGU, Bitcoin, and other crypto currencies and exchanges.

By the way, major support for KRE sits at 50.00, as shown on the following monthly chart. It's had difficulty holding onto, and adding to, gains made above that level since November of 2016.

A break and hold below could see price drop, in short order, to 40.00, or lower.

P.S. KRE gapped down and opened at 44.47 and hit a low of 41.98 in Monday morning trading...it's currently trading at 44.81 at 1:51 pm ET.

The following ZeroHedge articles provide background and current details on Silicon Valley Bank.


The following daily chart of USDC/USD depicts the de-coupling of the USDC 'Stablecoin' with the USD mentioned in the preceding article...one to watch, as well, for signs of continued or accelerating weakness.

P.S. More updates from ZeroHedge on Silicon Valley Bank...

P.S. Another bank bites the dust...Signature Bank (SBNY) has been closed...the 30th largest bank in the U.S., as of last year. The Wall Street Journal reported that, "Like Silicon Valley Bank, Signature relied heavily on deposits too big for FDIC insurance."

The price action in the following monthly chart of SBNY is pretty much identical to the others noted above.

It looks like all of the DEPOSITORS at SIVB and SBNY will get bailed out by the U.S. Fed and Treasury -- using taxpayers' funds -- as detailed in the following ZeroHedge article...but, INVESTORS will NOT be part of that bailout. Yes, it's really a bailout, and American taxpayers will pay for it, according to this ZeroHedge article.

By the way, depositors with less than $250,000 at Silicon Valley Bank are already insured by the FDIC, so their money is NOT at risk. However, reports indicate that 93% of depositors have OVER $250,000, so Biden is, essentially, bailing out his millionaire and billionaire Silicon Valley buddies, including California Governor Gavin Newsom and his three wine companies! Furthermore, Chinese high-tech start-up companies also had money deposited at SVB, so, they will also be bailed out! And, so, his government is "full of fools to shield men from the effects of their folly," as they "break down American capitalism," as more eloquently detailed in this ZeroHedge report. And, on that topic, Peter Schiff describes how the "latest bank bailout is another nail in Capitalism's coffin" in this ZeroHedge report. In fact, the news seems to be getting worse, as another Biden scandal erupts, as described in this ZeroHedge article.

I thought that after the last massive government bank bailout that occurred post-2008/09 financial crisis (for the banks deemed "too big to fail"), they assured American taxpayers that this would not happen again.

Somebody lied! 

If the Fed STOPS raising interest rates because of this situation, you can be assured that inflation will rocket upward...adding to America's already-bloated national security risks.

Will heads roll at the Fed, including Chairman Powell, as ZH is calling for? After all, they (along with politicians' reckless fiscal policies and over-spending sprees, especially under President Biden these past two years) created the conditions leading to these banking failures, inflation, and chaotic mess!


ZeroHedge excerpt

ZeroHedge excerpt

ZeroHedge excerpt


 

Mount Printmore

* UPDATE March 13...

Trading in U.S. markets has been volatile and mixed...as traders/investors try to decipher all available information and consult their crystal ball to forecast various fallout scenarios from this hot mess and position themselves accordingly!

P.S. Another bank -- Silvergate Capital Corp. (SI) --  was originally co-founded as a savings and loan association in 1988. The company began providing services for cryptocurrency users in 2016, and conducted an IPO in 2019. In November 2022, concerns were raised about Silvergate's health, following the fall in cryptocurrency prices and the bankruptcy of FTX

On March 8, 2023, the bank announced plans to wind down its operations and liquidate.

The following monthly chart of SI shows the spectacular parabolic spike and plunge of this bank.

This old saying is very appropriate to all things crypto, banks included..."If it's too good to be true, it probably is."

The following ZeroHedge articles provide further details in this regard.


So...that's at least three bank failures in the past week, alone.

The BIG QUESTION is: Are these bank failures a warning signal of systemic weakness in U.S. banks and the banking system, overall? 

This ZeroHedge article provides one point of view on this question.

We'll see what happens in the coming weeks. No doubt, volatility will increase in all markets, for the foreseeable future.

By the waySilicon Valley BankSignature BankSilvergate Bank and First Republic Bank are NOT on the G20's list of 29 Banks Deemed Too Big To Fail. So, why are they getting "bailed out?"

* UPDATE March 14...

Economic data released this morning shows that inflation remains stubbornly high, while real earnings fell, as shown on the following economic calendar.

So, with banks now failing at the Fed's current interest rate of 4.5% to 4.75%, while annual CPI still remains high at 6.0%, (and Core CPI MoM actually rose higher in February) it seems that, on the surface, the Fed will be unable to raise rates any further without fuelling a contagion to other banks around the country. Although, we may still see further bank failures, regardless.

Exactly how the Fed expects to EVER gain control of high inflation is a mystery...especially with President Biden planning on spending $7 Trillion more in his next budget👀

By the way, with smaller regional banks failing, depositors are now fleeing with their money and putting it into the large too-big-to-fail banks, as described in this ZeroHedge report. So, is this really a subsidy of big banks, as alleged? 




By the way, Congress and the Department of Justice need to investigate these bank collapses to determine whether anything nefarious was occurring that could have been prevented, had proper oversight been regularly conducted...then, report the truth to the American people.

American taxpayers (and investors) deserve that much, and more...instead of the gobbledegook currently being sold by the President and his minions (talking-head analysts and the mainstream press)!

P.S. According to this ZeroHedge report, it seems that, "The DOJ and SEC are (separately) investigating the collapse of Silicon Valley Bank, focused on the possibility of misconduct by officers, including whether stock sales by executives violated trading rules."

N.B. This entire mess could have been avoided IF the Federal Reserve had stayed out of meddling with government bank bailouts and interest rates (holding them abnormally low or near Zero% from 2009 until six months after inflation hit with a vengeance in 2021, while engaged heavily in Quantitative Easing monetary policies)...and, instead, let the free market determine fair market value of equities, etc., to prevent overheating of markets and prices of goods and services, as well as tacitly enabling banks to take unmanageable risks on questionable or shaky loans and investments over the past 15 years.

Instead, it seems they've broken the financial markets, to try to stem and reverse Biden's runaway inflation caused by his excessive and unnecessary spending spree of Trillions of dollars over the past two years, as outlined in the following ZeroHedge article.

* UPDATE March 15...

Please see my post regarding Credit Suisse Bank at this link for important information regarding European banking weakness.

* UPDATE March 16...

Please see my post of March 16 regarding another Regional bank failure...namely, First Republic Bank.

* UPDATE March 21...

What on earth were Silicon Valley Bank executives, et al, up to in the weeks/months prior to its collapse? 

Will any of their "unusual" activities ever be investigated?

Will anybody be held accountable for any banking violations, if they occurred?

If so, why were they bailed out?


ZeroHedge excerpt

Also, please see my post of March 21, which details the weakness in the KBW Bank Index.