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China’s 10-year Yield Bumping 4%

 
weekly Chart In Focus

Even before President Trump’s Asia trip, Chinese 10-year sovereign bond yields have been pushing higher.  And that means we should expect the same for U.S. 10-year T-Note yields.

I wrote about this relationship back in May 2017, noting that a big spread between the yields in China and the U.S. can mark an inflection point for U.S. yields.  To identify when the spread was getting to an actionable point, I used 50-2 Bollinger Bands.  That designation means that the bands are set 2 standard... Read More

The New FANG Plus

 
weekly Chart In Focus

The InterContinental Exchange (ICE) has just rolled out a new futures contract called the NYSE FANG+™, based on the original four FANG stocks (Facebook, Amazon, Netflix, and Google) plus 6 others.  The FANG term was originally coined by CNBC’s Jim Cramer.  Some analysts are seeing this as a sign of peak excitement over the trendy tech stocks, akin to a magazine cover indication.  While they may have a point, they are likely early in making this call.

The ICE website describes the properties... Read More

Crude Oil Backwardation

 
weekly Chart In Focus

For the first time since oil’s big price collapse in 2014, the crude oil futures are now back into “backwardation”.  That is a condition where the near month contract is priced at a higher level than the farther out month contracts.  And it is a condition usually associated with price tops. 

For the entire uptrend from crude oil’s 2009 price low to its 2011 top (which interestingly coincided with Osama bin Laden being killed), oil futures were in strong “contango”, which is the opposite of... Read More

Bond McClellan Oscillator Almost Oversold

 
weekly Chart In Focus

When we talk about “the McClellan Oscillator”, we usually mean the indicator calculated on the Advance-Decline (A-D) numbers from the NYSE.  But a McClellan Oscillator can be calculated on any sort of breadth data. And when the same math is used on closing prices, we call that a McClellan Price Oscillator.

The chart this week shows a McClellan Oscillator calculated on investment grade corporate bond A-D data.  Those data are published each day by FINRA, and they correlate very closely with... Read More

AAPL Not Confirming Market’s Higher Highs

 
weekly Chart In Focus

The share price of Apple Corp (Nasdaq: AAPL) is not making higher highs along with the Nasdaq 100 Index, and historically that has indicated a problem for the overall market. 

AAPL is the largest component of the Nasdaq 100, and accounts for 12% of the index’s calculation based on the modified capitalization weighting of that index.  So it is natural that there is going to be a strong correlation in the price plots.  When the two are doing the same thing, that is what’s expected, and so it... Read More

Treasury-Bund Spread Says Dollar Has More Room to Fall

 
weekly Chart In Focus

In Dec. 2016, the monthly closing spread between yields on U.S. 10-year Treasury Notes and the equivalent debt instrument from Germany was 2.24 percentage points, the highest reading we have seen since the 1980s.  As the spread has started to contract, we have watched the US Dollar Index make its biggest drop since 2011. 

Those German bonds are known as “bunds”, which is short for bundes which means “federal” in German, as in the Bundesrepublik Deutschland.  This week’s chart shows that the... Read More

Another Narrow Range for McClellan Oscillator

 
weekly Chart In Focus

Back in June, I introduced you to the indicator in this week’s chart, which examines how much movement the McClellan Oscillator has had over the preceding 15 trading days.  My timing was excellent, in that I so precisely picked the one time that a really low reading did not seem to matter at all. 

Most of the very low readings for this indicator mark meaningful tops for stock prices.  It was just my luck that I called attention to it just at the moment when a wonderful exception appeared. 

... Read More