Currencies are leading Equity Markets

Posted by Don Vialoux - Timing the Market

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Technical Action Yesterday
Technical action by S&P 500 stocks was quiet yesterday despite extreme volatility. One S&P 500 stock broke resistance (Pactiv) and none broke support. The Up/Down ratio was unchanged at (242/158=) 1.53.

Technical action by TSX Composite stocks was bearish. No TSX stocks broke resistance and five stocks broke support (Celtic Exploration, Labrador Iron Ore, Major Drilling, Quebecor and Toromont). The Up/Down ratio slipped from 1.16 to (86/81=) 1.06.

Interesting Charts

Currencies are leading equity markets. Yesterday morning, the Euro fell to another 4 year low. The U.S. Dollar moved higher and equity markets quickly moved lower. Yesterday afternoon, the Euro recovered. The U.S. Dollar moved lower and equity markets recovered.



Gold came under pressure with the recovery in the Euro.


Nice breakout by natural gas yesterday!


Dennis Gartman wrote an interesting article recently that explains the “viciousness of percentages”. The article was entitled, “The cost of getting even”. The article explains why liquidating an investment with a loss when losses are relatively small is am important strategy. He noted that a loss of 50% requires a gain of 100% in order to break even. He offered a table showing Percent Loss versus Percent Gain Needed to Get Back to Even. Here is the table:


ETF Update

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