Global Markets

Buckle Up: Bond Market Phase Transition Will Be Volatile

Have you ever noticed how the pace of water flow seems to increase as it approaches a waterfall? If you watch a leaf floating on the water you will notice that is starts to accelerate slowly when there is a drop ahead. And once it gets close to the drop it accelerates rapidly. Scientists refer to this as a phase transition and many forward thinkers are using this illustration for

Bonds Continue To Sell Off, But Risk-Reward Getting Better

I devoted last week’s market commentary to explaining the incredible volatility that has been occurring in bond yields. I explained that volatility associated with trading bonds has increased dramatically. The 10-year German Bund saw a 514% increase in yield in just 8 trading days! It moved 25% in one 32 minute period. German yields have declined since the day of that flash crash but remain elevated. The flash crash in Europe

Emerging Markets Trading Setups: ETFs In Mean Reversion

The Emerging Markets space has been an interesting one. All hopes of a rally last summer were dashed by a soaring US Dollar. But 2015 has been a different story, seeing what investors believed to be a relief rally, turn into an extended rally when the dollar began to crack during March/April. But after a strong rally in the Emerging Markets ETF (EEM), and one that took the ETF within

Australian Dollar: Chart Suggests A Rally Followed By Final Wave Lower

The Australian Dollar is putting together a nice rally for Forex traders. Also known as the Aussie and traded under the Forex pair AUDUSD, the Australian Dollar looks to be putting in a corrective rally before a final drop to its downside target. Although this may take several weeks to unfold, the pattern should offer opportunity for disciplined currency traders. The AUDUSD briefly touched above .80 today and is currently trading

Bonds Selloff: Why Investors Shouldn’t Sell Into The Panic

Last week was a difficult week for those of us that own bonds. In particular, ETFs like the iShares 20+ Year Treasury Bond Fund (NYSE:TLT) and the Vanguard Extended Duration ETF (NYSE:EDV) were hit the hardest as bond yields jumped (which resulted in the value of our bonds going down). The recent statement by the Federal Reserve is partly responsible because the statement introduced uncertainty and confusion as to the direction

Ned Davis: Deconstructing The “Cash On The Sidelines” Argument

Ned Davis, founder of the very well-respected Ned Davis Research firm has some interesting thoughts on the suspected large amount of cash that is commonly reported to be on the sidelines and still waiting to be invested. Davis goes right to the data as shown in this MarketWatch post by Mark Hulbert to find that there may not be as much “cash on the sidelines” as many would like to

Gazprom Bonds: A Leading Indicator For Crude Oil Prices?

Today, I’d like to highlight how the bond market can (and often does) serve as a leading indicator for equities and commodities. Below is a 1 year chart of Crude Oil prices (futures) pitted against energy giant Gazprom’s Corporate bonds. Note that Gazprom bonds bottomed before Oil prices did. And the subsequent turn higher in Gazprom bonds served as a leading indicator that oil prices might make a turn higher

Teucrium Agriculture ETFs: Bottoms Up or Bottoms Down?

The longer the US Dollar Index remains at or near 100, the more difficult it will be for the common grains (Corn, Soybeans, and Wheat) to put in a bottom. As I’ve mentioned before, Corn’s chart looks the best but time and price are beginning to wear on investors. Wheat and Soybeans continue to trade near their respective lows, but recent rallies have offered a little breathing room. Let’s walk through

Relative Strength Breakout For Emerging Markets (EEM)?

For the past 5 years, the Emerging Markets have been caught in a sideways price channel. And the net result has been an outsized underperformance of the broader market. But 2015 is a new year and it appears that the iShares MSCI Emerging Markets ETF (EEM) is trying to reverse its fortunes. This will likely hinge on whether or not it can hold its recent relative strength breakout from a falling wedge pattern