Seasonal Weakness and Institutional Rebalancing Add Pressure to Markets

August is a tricky month to commerce.

There was seasonal weak spot over the previous 35 years.

Liquidity is diminished and the amount is skinny.

Volatility can rise.

Tax loss promoting and rebalancing usually happens amongst establishments forward of the tip of the threerd quarter.

Earnings momentum and fading optimism can taper off in August.

Maggie Lake and I coated quite a bit as all the time, and the video is on the market under.

Listed below are a number of the notes I despatched her forward of time.

Yields topped as predicted and now, we might see additional drop-looking at basing however enjoyable begins over 90. The failed 100 if breaks 98 new leg down over 100 might see 103

Beneath is a chart of TLT. It represents every thing I coated with Maggie and in different Dailys.

TLT, after an public sale at present, offered off. Nonetheless, the chart is obvious. The rally Tuesday was to the July 6-month calendar vary excessive (I speak quite a bit about that).

The continues to outperform for now which exhibits threat on.

The Actual Movement Indicator had a imply reversion promote sign proper on the calendar vary excessive.

HOWEVER, the dots are above the shifting averages whereas the worth is above the 50-DMA and under the 200-DMA. A bullish divergence.

What I mentioned with Maggie is the likelihood that yields drop additional, TLT clears the resistance and SPY, can proceed to run as effectively, however look ahead to the efficiency to shift. DXY-Monthly Chart

That is the month-to-month chart of the greenback.

The rally again as much as the 80-month shifting common (100) was an ideal technical bounce into longer-term resistance.

The greenback beneath 98 will look extra like a failure and purpose to consider it should head even decrease.

That is bullish for commodities and Maggie and I cowl quite a bit about vitality and the varied uncooked supplies associated to vitality.

Has bottomed?

Very probably.

Maggie and I additionally mentioned and the way it seems nice over 3350 and over 3450 we might see new all-time highs.

, 38.50 is the purpose to clear after which 40 is the breakout. Gold Price Chart

That is the October contract of gold.

I’ve heard plenty of bears on the market.

I don’t see any bearish case on this chart.

The three charts I embody within the Day by day ought to show you how to decide threat and the subsequent course of the market.

A weakening greenback, decrease yields and rising gold costs are typically risk-off.

Ought to gold dump, yields stay flat, and the greenback runs up, the market might maintain, so that’s while you check with the July 6-month calendar ranges.

What’s breaking out, down or caught in a variety.