$USD – a vote on the country ever day…

Given that currency trading is a vote by the whole world on your country every day and now that President Blowhard believes the dollar’s recent rise was because of “confidence” in him instead of an overflow from the Obama Administration, the US dollar is likely to decline now.

Trump commented that yesterday that the dollar was too strong because of “confidence in me”, but the currency has been going sideways to down since his inauguration.  Confidence in him?  More likely a rising lack of confidence.

And of course, the US dollar always does decline in Republican Administrations.

That was never more pronounced in historical terms than the day George W. Bush made his “Axis of Evil” speech.  That moment was the precise top for the dollar in his term.  It was as the entire world heard that and thought that guy is crazy and ran for cover.  It declined 40 percent and has not completely recovered.  No analysts ever seem to want to talk about it, preferring to say a weaker dollar makes American multi-national companies more competitive, but think what a drop of 40 percent in net worth means to the biggest economy in the world.

Subsequently, from the day Obama locked up the Democratic Party’s nomination in 2008 the dollar bottomed.  It was as if dollar bulls knew he would be President and were, after the raging uncertainties of the Bush Administration, damn happy he would be.  There were some wild swings in the currency as Obama battled Congressional Republican obstruction (shutting down the government…) but once he was reelected, it was clear sailing to the upside until now.

So what now?

The new era of raging uncertainties is just beginning so, despite professed Fed Reserve tightening, it is probably best to be defensive, if not downright bearish, on the US dollar.

(right click on the chart for a larger view)

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#BullMarket – so many buy signals…

…it is almost scary.

But it is what it is.  I guess the Fed came to save the day…with higher interest rates no less.

With a low above a low on the NYMO after five weeks of highs below highs, it appears bears have one more day (tomorrow) to make their presence felt but after that, if the NYSI up, it will be rocket time again. In other words, new highs across the board someday soon (tomorrow, Friday, next week) and probably then some more…

Also, a nice little divergence there on my nifty-50 stock list from 42 sells in February to 38 four days ago (there are 39 on buys now).  Last time had a similar divergence was at the bottom in November.

(right click on chart for a larger view)

MAIN

$USD – the dollar historically speaking…

Historically speaking, the US dollar goes to hell under Republican administrations.  Does anyone actually expect it to be any different this time?

May take a while since Janet Yellen’s term has year or so to go and apparently the Federal Reserve is now determined to hike interest rates. But eventually, the businessmen now running government (who of course are totally unaware that the government is not a business) will want to debase the currency.

There is the belief that a weaker dollar enables American companies to more easily compete against competitors around the world.  Maybe so. But every time I look up while the dollar is down, it is the competitors buying US companies instead of buying their products.

Oh, well, this Bud’s for you.

(right click on the chart for a larger view)

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$SPY – testing an important level

SPY, the monster S&P 500 ETF, took a look at 212.5 again today and held that support in late day trading. A couple of weeks ago it was doing that repeatedly.

My guess it will bounce a bit from here but the question is how high and what after that?

If it does not run right back up to the top of the recent range there is a likelihood that the steep decline market bears have so long been waiting for will be at hand.

The confounding thing about the general market in the past three months has been how many fundamental and technical indications have dropped into place that bear similarities to the market tops in 2000 and 2007 but the price drop has not gotten going in earnest.

For instance, monthly NYSE margin debt has clicked down again in a massive divergence to the market’s high level sideways move. Breadth in general has been declining despite price index defiance. It could be only the Fed, with an eye on the election, is holding the market up.

Whatever.

If today’s rip to the downside, on the other hand, is the shot that cripples the lumbering ship, 208 on SPY could be seen in a hurry, and 200 eventually would not be out of the question.

This is one of those times when long-term investors better sit up and take notice.  Decide how much of the current gain one is willing to lose and stick to it.  If there is a sell-off (for the rest of year?),  the signs it is, once again, not different this time have been obvious for some time.

(right click on the chart for a larger view)

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$REM – A Possible Triple-Bottom At Support with a 14.83% Yield

The question for REM, the iShares Mortgage Real Estate Capped ETF, is it at a triple-bottom support or on a pause in an obvious down trend before a plummet into oblivion?

But the real question may be — is the technically over-sold condition in REM a sign that all the bad news from the Federal Reserve’s upcoming anticipated interest-rate hike already in the stock?  Hard to tell, it is already down eight percent for the year.  That may be enough.

The stock, which closed today at $9.91, has a yearly range from $12.69 to $9.76.

The triple-bottom at $9.76 is only a possibility since it always takes a confirming rally to complete the technical formation.  That clearly has not happened…yet.

Almost needless to say, the ETF’s current 14.83 yield (as of Oct 31, according to Yahoo Finance) is compelling.

And, at this point the good news for traders, and for long-term investors who refuse to look at red ink each day no matter what the yield, is the stop loss, if the down trend is bound to continue, is nearby.  Quite frankly I, for one, do not want to be here if this possible triple-bottom at 9.75 gets taken out (after all this could also be, technically speaking, a massive descending triangle with lots of downside left…gulp!).

(click on image for a larger chart)

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