Wednesday, March 18, 2015

The US Dollar Index Trade May Soon Explode

The U.S. dollar rallied again last week – tacking another 1.78% onto its extended rally.
The current rally is the most dramatic rise we've seen in the buck in the past 20 years. And, like most big rallies in just about any asset, traders are piling into it in anticipation of further gains.
But the dollar's parabolic move is likely coming to an end...
Take a look at this long-term, monthly chart of the U.S. Dollar Index plotted alongside its 50-day moving average (DMA)...
The dollar is up 25% in the past eight months. That would be a terrific gain for a stock – though not uncommon. But it's an amazing gain for a currency – which tends to be much more stable. (more)
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Lumber Is Crashing

Lumber is down another 3% today. It’s down nearly 8% in three trading days. It’s down 33% since last March – click to enlarge:
[...] The Dow Jones Home Construction Index (DJUSHB) is barely green despite the rip-roaring 26-point, 1.3% gallop higher by the S&P 500. The DJUSHB initially bounced with SPX, dropped after the disappointing builder “sentiment” index. After it dropped the HFT algos tried to save the homebuilders with sharp bounce back into correlation with the SPX. As I write this, the DJUSHB is now negative on the day.
But alas, fundamentals re-assumed control of the homebuilder sector. I use the DJUSHB because it has the highest concentration of homebuilder stocks out of any of the indices/ETFs. It also has a healthy dose of companies which supply new homebuilding activity. If the DJUSHB can not move higher on a day like today in which insanity is driving stocks, it means something is very broken with the fundamentals underlying the sector.
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Marin Katusa: Lehman-Style Crisis Coming in Late 2016, Early 2017

Cris Sheridan welcomes Marin Katusa, Senior Market Strategist at Casey Research and author of The Colder War. Marin and Cris cover the outlook for China this year, as well as the energy sector. Marin discusses his growth projections for China, and why they differ significantly from official reports. Marin also predicts a day of reckoning for the U.S. shale industry in the late 2016 to early 2017 time frame. They also cover Marin’s forecast for the price of oil, as well as his outlook for the U.S. dollar. 
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SINA Corporation, through its subsidiaries, operates as an online media company in the People’s Republic of China. It operates, an online brand advertising portal that provides region-focused format and content, including multimedia news, sporting events news, automobile-related news, business news coverage and personal finance columns, entertainment news and events, technology updates, digital products reviews, luxury goods and services, collectibles, and video products, as well as an interactive platform for fashion-conscious users to share comments and ideas on health, cosmetics, and beauty topics. The company also offers SINA mobile, a mobile portal, which provides news information and entertainment content from for mobile users in mobile browser and application format.
Take a look at the 1-year chart of Sina (Nasdaq: SINA) with the added notations:
1-year chart of Sina (Nasdaq: SINA)
Although it has taken some pauses along the way, SINA has been on an overall decline for the entire year. And during the last 3 months, the stock had also created an important level of support at $35 (red). Now that the stock has broken that support, lower prices should follow.

The Tale of the Tape: SINA broke a key level of support at $35. A trader could enter a short position on any rallies up to or near $35 with a stop placed above the level. If the stock were to break back above the $35 level, a long position might be entered instead.
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Wisdomtree Investments (WETF) Chart of the Day

The Chart of the Day is Wisdomtree Investments (WEFT).  I found the stock by sorting the All Time High list for the stocks with the best technical buy signals, then used the Flipchart feature to review the charts.  Since the Trend Spotter signaled a buy on 1/20 the stock gained 34.59%

Wisdomtree Investments is an information services company that publishes and markets Individual Investor magazine and Individual Investor's Special Situations Report. In addition, the Company, through wholly owned subsidiaries, is the investment manager of private investment funds.

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