EurUsd daily chart
/ES Chart weekly
The CBOE VIX chart is interesting because at 13 could be a good setup for a long position, but the S&P500 seems ready to make another bullish leg. Positions on VIX options should have a medium expiry as they can work well as portfolio protection without having temporary volatility collapse and fast time decay erosion.
Gold correlation negative correlation with the US dollar increased: short term EurUsd chart is similar to GLD chart. The commodity went below its 200SMA, but the downtrend that created a pattern of lower highs was generated on the last June.
Crude Oil Futures daily chart
The /ES has a bullish pattern as it rose above the short term dynamic resistance, it seems likely a test of its record high at 2,191.5.
Crude Oil made a pullback against its 200SMA, if selling pressure would continue the commodity could test the 61.8% Fibonacci retracement of the bullish wave that started last February
United States elected Donald Trump as a President, and the reaction of markets was completely different than most of financial analysts expected.
Volatility just after the result spiked, and risk appetite reversal trades were placed across the board. This effect was just temporary, as at around 11 EST (5 CET) on last Wednesday, assets bottomed and started an impressive rally.
The narrative channeled through the media did not match the reality, as last week the DJIA made a record high and the US dollar soared. The Volatility Index dived, as protection buyers realized that market sentiment was not negative as the consensus had expected.
USA President elected Donald Trump said several times during the election campaign that rates are too low. Probably in 2018 the Federal Reserve will have a less dovish chairman, but infrastructure spending should increase the Federal debt, and rating agencies could change their rating outlook. The evaluation of those monetary and fiscal effects make difficult now to assess the long term trend of the Greenback. The 10 year Treasury Note Future, /ZN, is losing ground for the fifth consecutive session, and the consequences are seen not just on the USA market, but also abroad, with increased yield in the sovereign bond market.
14th November 2016
/ZN Futures daily , fear of a rate hike or expectations of a wider deficit?
In the short term however, if EurUsd will drop below its 2015 low at 1.04617 reached last March, the downtrend to the parity could materialize. The US dollar is rising also against the Japanese Yen: the Bank of Japan admitted that its tools aimed to achieve the inflation targeting are not delivering the desired results. Kuroda “de facto” is managing the biggest holding company of the Japanese stock market and the ECB should take lessons as the equation money printing equal inflation works perfectly only in theory.
VIX Daily chart