Rally Hits The Wall

  This week is a review of where we have been and a look forward as to what may happen next. First, let’s rewind the tape to the beginning of March. “Most importantly, the market is currently in the process of building a consolidation pattern as shown by the ‘red’ triangle below. Whichever direction the market…

Acacia Communications: A Cautionary Tale Of Early Secondaries And

About 18 months ago, I made a bearish case for Acacia Communications (ACIA) based on the timing, pricing, and nature of a secondary stock offering that was sandwiched between ACIA’s optimistic earnings guidance and subsequent news that major customer ZTE Corp. significantly reduced its guidance. The stock has never been the same and has drifted lower ever…

Dollar Tone Improves

The US dollar was broadly higher last week. It seemed as if the inexorable rise in US interest rates may be beginning to give it some traction. The US 10-year yield made a marginal new four-year high, creeping closer to 3%, while the US premium over Germany surpassed 300 bp for the first time.  The Dollar Index’s…

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“Rebalancing remains at the forefront of Chinese and global policy debates…Notwithstanding the rise in global trade protectionism, the somewhat forgotten news these days is that there has been a large correction in China’s current account surplus, which has averaged a rather modest 1.9% of GDP over the past five years, compared to a peak of…

VIX Declines To Cycle Low While SPX Breaks Trendline

VIX declined to a late Master Cycle low on April 17, then proceeded to rally above Intermediate-term support at 16.81. VIX is now on a buy signal. (ZeroHedge)  When Morgan Stanley’s chief equity strategist Michael Wilson released his 2018 equity outlook earlier this year, one particular observation struck us: a curious correlation between volatility and the…

Saturday Charts-Check

Last week started strong with new highs outnumbering new lows by good margins. Those numbers deteriorated through the week ending with new lows outnumbering new highs by significant margins. – From Mike Burk’s weekly blog I don’t like stocks at the moment, and the two charts below show the major reason why. Volume is with…

A Terrible Thursday Falls On Friday

The problems of Deutsche Bank (DB), which fired its own Herr Mueller last week, are not yet at an end. Yesterday an erroneous transfer from the German bank to an outside account went out, to pay the equivalent $35 billion. The recipient was honest and told the bank about the money received so it could…