Thursday, October 29, 2015

Breakout in the U.S. dollar

With growing anticipation that the 1st rate increase from the Fed is nearing, the U.S. dollar index broke out of a multi-month consolidation.
The Federal Reserve today hinted that a rate hike was "still on the table at its next meeting" in December.

Traders in response to the more positive tone from the Fed, pushed the dollar higher and out of the consolidation.

The expectation now is that the US$ will gradually advance and start another retest toward par.

Bottom line: The U.S. dollar index broke out of a consolidation that held it since March.

The probability is that the dollar will now advance toward the March high of $1.00 in the weeks to come.

It is important to note that a rising US$ makes commodities less attractive.

This Setup in Natural Gas Is Getting Even Better...

Folks continue to be bearish on natural gas...
Last week, I told you the National Oceanic and Atmospheric Administration (NOAA) is predicting a mild winter this year. A warm winter would mean less natural gas consumption.
Now, the U.S. Energy Information Administration (EIA) is saying that household natural gas heating bills will fall by 10% this winter.
I disagree...
Part of the EIA's forecast is based on NOAA's winter prediction. But as I told you last week, I give premium weather service WeatherBELL Analytics' models more credence. The meteorologists at WeatherBELL are predicting a major cold and snowy winter over the South and into the East. And that winter will get a lot worse after December and run late through March.  (more)

Valeant Pharmaceuticals Intl Inc (NYSE: $VRX) near a bottom?

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) This is a stock that could head higher from Wednesday's close. VRX is in the process of bottoming and I expect a pop above $122 very soon. The A/D indicator on chart shows the strength of conviction behind this short-term bullish trend. On radar.

Wyndham Worldwide Corporation (NYSE: WYN)

Wyndham Worldwide Corporation provides hospitality services and products to individual consumers and business customers worldwide. It operates three in segments: Lodging, Vacation Exchange, and Rentals, and Vacation Ownership. The Lodging segment franchises hotels in the upscale, upper midscale, midscale, economy, and extended stay segments, as well as provides property management services for full-service and select limited-service hotels. The Vacation Exchange and Rentals segment provides vacation exchange services and products to owners of intervals of vacation ownership interests (VOIs); and markets vacation rental properties on behalf of independent owners. The Vacation Ownership segment develops, markets, and sells VOIs to individual consumers; and provides consumer financing in connection with the sale of VOIs, as well as offers property management services at resorts.
Take a look at the 1-year chart of Wyndham (NYSE: WYM) below with added notations:
1-year chart of Wyndham (NYSE: WYM)
WYN has been declining ever since it’s beginning of March peak near $93. However, over the past two months the stock had fallen into a common pattern known as a rectangle. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern.
WYN’s rectangle pattern had formed a $80 resistance (green) and a $70 support (blue). At some point the stock had to break one of those two levels, and last yesterday WYN broke the $80 resistance.

The Tale of the Tape: WYN broke out of its rectangle pattern. The ideal long opportunity would be on a pullback down to the $80 level with a stop placed below it. A break back below $80 could negate the forecast for a move higher.