News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Want to hear my thoughts on the US Dollar? Check out yesterday's recording with #AuzBiz hosted by @KaraOrdway on 'The Trade' We discussed a #USD index, Treasury yields, $USDJPY, $AUDUSD and $NZDUSD https://t.co/yxwquL1btp https://t.co/RtWjlN6kpv
  • Gold has plunged nearly 5% off the Monthly high with the sell-off now probing key weekly support here at 1738/47- looking for a pivot here with the Fed interest rate decision on tap. Get your $XAUUSD market update from @MBForex here:https://t.co/Vnxi41lETt https://t.co/FyZuHNzsU3
  • Feels like the market has been front-running next week’s FOMC announcement, which will reveal updated dot plot projections. Expectations clearly set for a more hawkish shift in guidance. That said, if the Fed does not deliver, US Dollar bulls could be disappointed. $USD $DXY https://t.co/o2v6ibac3L
  • USD/CAD has been chopping around the past week-and-a-half, offering virtually no cues on its next direction. Get your market update from @PaulRobinsonFX here:https://t.co/eq1YkOa3mC https://t.co/V6h8BjyeGa
  • FDA panel votes 16-3 against approving Covid-19 booster shots - BBG
  • RT @C_Barraud: 🇺🇸 Americans Haven’t Been This Down on #Housing Market Since 1982 - Bloomberg *Link: https://t.co/wWFnbAwIDO https://t.co/6G…
  • US Dollar Price Action Setups Pre-FOMC: EUR/USD, GBP/USD, USD/CAD https://www.dailyfx.com/forex/analyst_picks/todays_picks/james_stanley/2021/09/17/US-Dollar-Price-Action-Setups-pre-FOMC-EURUSD-EUR-USD-GBP-USD-GBPUSD-USD-CAD-USDCAD.html https://t.co/J25MYsXCa9
  • The US Dollar is pushing up to a fresh September high after the release of University of Michigan Consumer Sentiment data. Get your $USD market update from @JStanleyFX here:https://t.co/2CDNZh2a89 https://t.co/bULXuCaHKk
  • I have this $SPX chart taking over one of my whole screens, and I just keep staring at that 50-day moving average... https://t.co/R9LQAuL2DL
  • RT @TheStalwart: Nice chart, which shows why countries in green on the perimeter, like Iran, Peru, and Turkey are known for their stability…
Will a Buy the Dip S&P 500 Rebound Last and Can Euro Techs Play Out?

Will a Buy the Dip S&P 500 Rebound Last and Can Euro Techs Play Out?

John Kicklighter, Chief Strategist

Talking Points:

  • The S&P 500 rallied this past session, reversing what seemed a critical trendline break through the end of last week
  • A 'buy the dip' mentality suits current conditions as political uncertain remains and Jackson Hole Symposium is still ahead
  • With risk assets on hold but also still on the hook; traders should monitor volatility, gold and cryptocurrencies

How will risk trends develop moving forward and what measures should we monitor to track its progress? Join the Fundamental Trading webinar Monday to find out. Have trading, market or strategy questions? Ask them at Tuesday's Q&A. Sign up on the DailyFX webinar calendar.

The S&P 500 posted an abrupt rally this past session - its fourth largest this year. That was particularly impressive performance given the lack of motivation on the calendar and in the headlines as well as the lack of tempo for other speculative assets. Should we read this performance to be an indication of renewed speculative appetite for US equities - or even further, can it signal a renewed appetite for 'risk' that can carry the broader markets? Such a forecast would be a considerable stretch as motivation is just as important today as it was yesterday. Returning to record highs is hard enough, extending them is even more difficult. And, we simply don't have a second wind to inspire a market saturated for exposure to scrounge up unutilized capital to buy into a market just off record highs. So, what was the motivation of this benchmark index's performance this past session? Opportunism.

The 'buy the dip' phrase has become a parody in the market for a drive that seemingly cannot be swayed from its bullish course despite growing evidence that it has come unbound from value. However, there is genuine value to be found in this mentality given the proper circumstances. Buying on the dip is a trading approach pursued when heavy by the speculative rank with no deep commitment to the conviction in making deep assessments of value. In the S&P 500's position, we were left with a meaningful technical break from late last week that forced a break of trendline support that stretched back months and survived jolts of volatility surprising event risk and themes like the political risk surrounding the US-North Korea standoff. Yet, despite the implications that most technical traders would read from such a break, there was no follow through to speak before or after the weekend. What opportunity could have been generated from traders looking to take advantage of an early wave of momentum never arose; and attention drawn forward for data like PMIs, the President's next prepared rally and the Jackson Hole Symposium later this week would further throttle opportunity. In such a situation, the speculative exposure pushed behind the nascent bear trend and a market used to seeing pullback return to broader trends would understandable buy on the dip. Yet, just as unique as the rebound is, the follow through would naturally come with equally limiting caveats.

Similar to the path-of-least-resistance move from the S&P 500 and other risk markets, the Dollar would see an easing of its own speculative tension. The rebound the Greenback experienced this past session was very limited. News stories suggesting progress on tax reform among officials such as Treasury Secretary Mnuchin make it more palatable for investors that need a traditional fundamental reason, but there was little to work with and little to motivation to turn more productive opportunities from pairs like EUR/USD, GBP/USD and USD/JPY. If we are looking for more traditional fundamental sources to guide us, there are few better positioned currencies than the Euro. The world's second most liquid currency had ECB President Draghi speaking today (as well as on Friday) along with Euro area PMIs. If we could get a clear signal for the currency, it could cue appealing technical setups for the likes of EUR/USD, EUR/JPY and EUR/GBP. However that may be asking too much. Meanwhile, outside the most liquid circle, there are dynamics that global investors should keep close track of. Gold is keeping the pressure on a 1,300 triple top as the Jackson Hole Symposium looks to draw the focus on global monetary policy. Cryptocurrencies have shown uneven sparks of volatility with a break in general correlation that suggests a deep speculative influence. Then there is the sleeper concern surrounding China as a global catalyst with the Yuan at an 11 month high while USD/HKD is pushing further into intervention territory. We measure market developments for trade opportunity in today's Trading Video.

Will a Buy the Dip S&P 500 Rebound Last and Can Euro Techs Play Out?Will a Buy the Dip S&P 500 Rebound Last and Can Euro Techs Play Out?Will a Buy the Dip S&P 500 Rebound Last and Can Euro Techs Play Out?

To receive John’s analysis directly via email, please SIGN UP HERE

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES