Next week, the FOMC meets. The two-day meeting, the year’s last and a highly anticipated one, ends Wednesday. A rate hike is widely expected. The fed funds rate has been stuck near zero for the past nine years. Markets currently … Continued
Small-caps have a big problem. Investors do not fancy them, and it has been a while. Having peaked last June, IWM, the iShares Russell 2000 ETF, with at least one false breakout, has lagged its large-cap brethren. There probably are … Continued
The following are futures positions of non-commercials as of December 1, 2015. Change is week-over-week. 10-year note: Will it or wouldn’t it? Will the Fed switch into a tightening mode in the face of U.S. manufacturing just entering contraction? In … Continued
For a while IWM, the iShares Russell 2000 ETF, lagged other major U.S. indices. The ETF, as well as the Russell 2000 index are still below their respective August 17th highs, which preceded a five-day, 11-percent cliff dive (Chart 1). … Continued
The following are futures positions of non-commercials as of November 24, 2015. Change is week-over-week. (Due to Thanksgiving last week, the CFTC released numbers on Monday, instead of last Friday.) 10-year note: Chances of the Fed moving next month (FOMC … Continued
Hindsight is always 20/20. The post last Monday hypothetically discussed three ways to play beaten-down GLD, the SPDR Gold ETF: (1) go long at $103.09; (2) short November 27th 102.50 puts for $0.49, which could result in effectively going long … Continued
Directionally, ITB, the iShares Dow Jones Home Construction ETF, and U.S. homebuilder sentiment tend to move together. The correlation coefficient is far from perfect, but at 0.68 between May 2006 and November 2015, it is decent (Chart 1). The National … Continued
Spot gold fell 0.45 percent last week – its fifth consecutive down week. Over the past two weeks, the rate of decline has softened. But that is small consolation to gold bugs that have been at the losing end of … Continued
The following are futures positions of non-commercials as of November 17, 2015. Change is week-over-week. 10-year note: Hawks are in, doves are out. At least that is how markets are beginning to bet on the odds of an interest-rate hike … Continued
Two-year Treasury yields – supposedly the most sensitive to Fed policy – are acting as if they are beginning to price in a December hike. On October 14th, the two-year Treasury bill yielded 0.57 percent; by November 6th, the yield … Continued