Well the SPX finally did it. New all time highs.
The Nazzy, still a ways away from their own all time highs, did manage to breakout above its downtrend line. Bullish also.
The Dow Jones is just about 100 points from all tome highs.
And the Russell still has a lot of work to do for new highs, but its sporting a very bullish patter right now.
Today’s session began on a higher note as investors eyed a continued rebound in overseas markets. It also didn’t hurt markets that the king of QE and other types of financial engineering tools, Shinzo Abe of Japan, won a super-majority, paving the way to an easier approval process of potential future stimulus measures.
The Nikkei rose over 4% overnight on this report and the YEN finally took a bit of a dive.
This is interesting. Some of you may not follow the funny pages as closely as me as it relates to macro events and global markets, but a couple weeks ago it leaked that Bernanke was making a special trip to Japan to meet with Abe and BOJ Governor Kuroda. Bernanke was expected to discuss Brexit and the BOJ’s negative interest rate policy with Abe and Kuroda.
Some also thought there was another motive, the discussion of helicopter money. So the catalyst that sent both the Nikkei soaring and the Yen tumbling, was not so much Kuroda’s whirlwind victory in Japan’s latest election – largely as expected – but Abe’s announcement that he may proceed with launching a JPY10 trillion stimulus, funded by Japan’s first new major debt issuance in four years.
So maybe catalyst that sent both the Nikkei soaring and the Yen tumbling, was not so much Kuroda’s victory in Japan’s latest election, but Abe’s announcement that he may proceed with launching a JPY10 trillion stimulus, funded by Japan’s first new major debt issuance in four years.
Whether you are in my camp and believe that all of this stuff will eventually implode modern society as we know it, you have to walk away knowing that there will be a lot more stimulus, maybe some helicopter money and surely higher markets for the short term. Markets love this stuff.
As you can see below, etf DXJ ( long Nikkei/shortYen), finally had a big day. This one could run for a while.
The next move in my opinion could be China. Everyone over there has become pretty bulled up of late and the Shanghai and the Hang Seng may start moving up in sympathy.
A long play I like there is YINN which is a leveraged etf that gets you long China. I am watching China, and if it makes a move I will probably get long this one. I will let you know.
At resistance. Real nice setup here.
I added 2 new ideas to the P&L today. Also check the P&L for any tweaks on stops.
1-SCO– is the etf that gets you short crude. Oil is struggling here. Strong dollar, zero global growth, stockpiles and a deflationary environment have weighed. Hopefully we can see crude get down to 42-43 so we can make a nice trade here. The lower the better though. Nice little bull flag on this etf right now.
2- I also added TGLT
This one is interesting to me. Not only has it been building a really nice base, but there is a big short position (38 days to cover actually) in the stock, so any positive news or just more buying could get the shorts covering. At least that what we would like to see happen. I mentioned this in the Sunday video as a long idea to watch two weeks ago. Its up 40% since then, but it still looks higher. Target is 9-9.50 for starters.
