Week In Review – January 11

Summary

  • EM bookends in local currency yields. Turkey in 33 bps, Mexico out 17 bps
  • US 10-year yields out 3 bps. Some squishy auctions last week
  • U.S. corporate credit in yuuuge
  • Euro periphery tighter
  • EM FX continues to recover
  • Dollar index still banging around in 95-97 range
  • Big rebound in RMB
  • Aussie stronger
  • British Pound moving higher on expectations no BREXIT and a new referendum
  • Good week for stocks, led by Nikkei
  • U.S. biotech continues to ramp. ETF up over 13 percent YTD
  • Russell outperforming major U.S. indices, up almost 5 percent on the week
  • Crude bid. Up over 13 percent YTD

Commentary:  Earnings kick off with Citibank in the morning.  Stocks behaving well but we will be looking closely for a reversal signal, such as few daily Doji candlesticks, for example.  The slowing global economy is the word and a sprouting narrative that could derail the recent ramp, and generate the retest of the December low that we expect and is needed to bolster for a more sustained move higher.

Thursday’s high at 2597.82 is the level du jour and just only a gimme put from Friday’s close.  Let’s see a  convincing breakthrough and move over 2600, which opens the path to the 50-day at 2635.06, or 1.49 percent higher.  We think you are supposed to sell up there.   The level to watch to the downside is the key Fibo at 2573.61, which is now yuuge,  and if breaks, it’s time to get shorty.   We are on Doji watch, which has been the signal of the short-term top in this bear market.

Looks like the ‘bots are doing their thing in overnight futures probing the downside for real buyers.

s&p

 

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Recessions And Stock Drawdowns

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Yield Chase On Again, Not Sure How Long This Will Last

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