Don't worry about the yield curve and focus on current market opportunities

Don't worry about the yield curve and focus on current market opportunities

Japanese Yen is presenting an opportunity. British Pound did not achieve what is necessary for a good buy signal but still on the front burner. A position in Energies. And looking for to be long in S&P500 no matter the panic around the yield curve.


CURRENCIES

BRITISH POUND was not fast enough to get above the high of 08/09/2019 as discussed in "Currencies, Metals, Stock market and an easy to understand fundamental analysis". Immediate buy was not possible. This up move was accompanied by a good accumulation. That puts it on my list to reassess the probability for a buy after a pullback.

JAPANESE YEN

The seasonal pattern is showing that there is more room to the upside. Good accumulation and no signs of distribution. Supporting volume on two days after the pullback last week. All this suggest to me that Japanese Yen can go up one more time.

Japanese Yen analysis 08/18/2019

The price action of the last few days confirms this. Thursday's bar broke the prior day's low then immediately went back up. The low of that bar (0.9385) is like a magnet for the market. The currency tried to reach that level on Friday but with no success. That increases the probability of an up move. I will look for an opportunity to get long.

ENERGIES

CRUDE OIL
I have a long position here from last week.

Crude Oil open position 08/18/2019

It is a short-term one targeting the area around the previous top (08/13/2019). I expect Monday to start with a move up towards Friday's high. That is a key level to further gains.

STOCK MARKET

S&P500

The yield curve inverted (if we can call it that), but only intraday. According to FRED, the yield curve didn't cross the zero line. I will focus on the recession and all this panic in a separate article.

Currently, my recession indicator dropped to 26%. This is 1% down from the previous week no matter of the inversion. How strange! :) So based on the current data I do not expect a recession in the USA in the next 6-12 months.

S&P500 has the potential to go up. I will look for buy signals this week.


Now, let's find your missing piece!

Vassil Banov,
Founder of Piece of Trading

Trades mentioned here are either taken or will be taken by the author if the right conditions appear. They are NOT recommendations nor any of this constitute investment advice. Please read the Risk Disclaimer

Seasonal indicators courtesy of Larry Williams, ireallytrade.com. Charts made with TradeStation®. tradestation.com

TAGS: Recession, S&P500, Crude Oil, Japanese Yen, British Pound, Yield Curve, SPY, Stock Market, Seasonality, Accumulation

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