The market is starting to look like it is rolling over for real. My new Kairos 2.0 indicators are giving me great intel on these charts and, specifically, we’ve been looking at the CAC, FTSE and the HGX. All three extended losses last week. It finally came to the point where the Dow, as well as the European indices, gave signals for a bounce.
The U.S. dollar is mixed against major pairs. Safe havens like the Swiss franc, Japanese yen and the euro have gained against the greenback, while the Canadian and New Zealand dollars along with the pound are lower. Strong data in Europe boosted the single currency but the rally was short-lived after the Trump administration announced a review of US-EU trade that could result in a 20% tariff on European car imports.
The coming week (June 25-29) should continue the minimally reversing, trending markets moves, but with the addition of rowdy bullhorns in several symbols. The only potential mathematic exceptions are crude oil, soybeans and bitcoin.
Happy golden spiral day! Am I the only one who celebrates this day? Many people don’t know it exists, but it is part of the seasonal change point time window that impacts all markets on a cycle basis. What is golden spiral day? It is June 18, simply put 6.18.
The U.S. dollar gained against all major pairs this week. A hawkish Fed and a dovish European Central Bank (ECB) gave the edge to the American currency. U.S. President Donald Trump scored diplomacy points in Singapore by meeting with North Korean leader Kim. Trade war fears were once again at the forefront as the Trump administration announced new tariffs on Chinese goods on Friday. Crude oil prices plunged as supply might be on the rise with heavy anticipation on the Organization of the Petroleum Exporting Countries meeting on Friday.
The coming week (June 18-22) should continue the trend of trending symbols. The only potential exceptions are gold and soybeans whose weekly pivots are sideways for reversal scalpers and who already made a wide-range move likely to consolidate sideways. However, both gold and beans have trending monthly pivots--a wild card working against my Iron Condor favorite trade.
So, what about that wedge in the Nasdaq I was looking at last week? The upward momentum stalled 61 days from the prior high. Oddly enough, it was tech stocks that stalled last week while McDonald's had that big day on Thursday which drove the Dow. MCD is rated seventh in the Dow in terms of its weighting. A lot of other Dow names started well but backed off. On the same day all the FAANGs got hit.
May has left the building and the market has not gone away. Markets are stubbornly hanging on in divergence fashion with the Russell 2000 having made a new high, the Nasdaq 100 very close and the Dow lagging badly. The Dow has never held above the mysterious balance line I’ve discussed many times since March.
The week ahead is a big one for the Aussie dollar and it starts off quickly with Retail Sales among other economic data points Sunday night at 8:30 p.m. Central. Taking the cake is the Reserve Bank of Australia’s monetary policy meeting at 11:30 p.m. Central Monday night. Though rates are expected to stay unchanged, the RBA’s tone has stood firmly that the next move in rates is likely higher than lower.
The U.S. dollar is higher against major pairs on Friday after a strong US jobs report was published. The U.S. nonfarm payrolls (NFP) report showed the economy added 223k jobs last month driving the unemployment rate to a 18-year low of 3.8 percent. Wage growth surprised to the upside with a 0.3% gain that validates the comments from U.S. Federal Reserve members about the need for more rate hikes this year.