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A yield curve can steepen under inflationary or deflationary pressure.
Inflationary: Generally, long-term yields rise in relation to short-term yields as both rise nominally, or more importantly long-term yields rise nominally.
Deflationary: Short-term yields decline in relation to long-term yields, as both decline nominally.
(more…)It was brought to my attention yesterday that folks were having some issues with the McClellan Oscillator and the McClellan Summation. These are both working smoothly now!
Original post here: Solid labor market data tempered optimism for a potential rate cut, putting pressure on stock prices. The substantial jobs report on Friday presented a mixed picture. In December, nonfarm payrolls grew by 216k, maintaining the unemployment rate at 3.7%, with hourly earnings increasing by 0.44%. However, enthusiasm was tempered by revisions, with October revised down and November. This marks a trend where 10 of the last 11 months have seen downward revisions from the initial nonfarm payroll figures.
Initially, stock index futures reacted negatively to the news, but a turnaround occurred at the opening bell, leading to a rally until around lunchtime. However, most of these gains were later retraced. In a down cycle, we are likely to see rallies being sold, indicative of a downtrend. Despite the volatility, the major averages mostly closed in positive territory. It is crucial that the markets close positively on Fridays. Our economy is primarily consumer-based, and a positive market close on Fridays tends to boost consumer confidence, encouraging weekend shopping.
(more…)Today is the last trading day of 2023, and is the only significantly bearish leaning day this week. Historically the stats today indicate 38.1% stats for SPX closing green, and only 28.6% green closes on NDX. That doesn’t of course mean that the day will be particularly interesting, but intraday at least the last couple of days have been more interesting than I was expecting.
On the bigger picture, I was looking for a retest of the 2023 high on SPX to set possible daily RSI 14 and RSI 5 sell signals brewing, and we saw that. The high this week so far is at 4793.30, just 25 handles below the all time high, and I’m still thinking that a decent retracement looks very close, and that SPX might make a marginal new all time high before we see that retracement.
Either way we appear to be setting up for an interesting January.
(more…)I hope everyone had a great holiday. I’ve had an enjoyable time at home with my three (adult) children. We’re not religious, but it is always a good time to see and enjoy family.
One slightly strange thing to the Brit eye about Christmas is that over here and in much of Europe the day after Christmas is a significant holiday too, always a Bank Holiday and called Boxing Day here. The odd thing is that Boxing Day doesn’t exist in the US and is an immediate return to trading the day after Christmas Day. That kind of works for me though, as I enjoy my work, and the days between Christmas and New Year are a good time to prepare for what is often a very interesting January. In my view the odds favor seeing an interesting January this time.
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