Friday, February 24, 2017

NDX closes up once again!!

Since breaking out (of the grey-box) in the beginning  of the new year, NDX has been in an uptrend like never before??

Despite the predictions (of financial guru's) of a slower economy and a down trend, in the equity markets, commensurate with the change in the US Govt, the Fed signaling hikes in interest rates this year, the market is unaffected. It seems to be welcoming the announcements of de-regulations and the enactment of restrictions on foreign trade. One of the reasons for this bull run could be the better than expected earnings this quarter being reported by the US companies, as well as, the prevailing economic conditions such as record low unemployment and interest rates.

Today, I read somewhere on twitter that the current sequence of consecutive up days in the markets has been a record not seen in the last 40 years. I don't know if that is true? what I do see is that every single attempt by the bears to bring the markets down, has been meet with a strong resistance from the bulls. Today was a good example. As NDX gapped down quite a bit as the markets opened but it ended the day in green territory. It was quite evident that all the sell orders are being absorbed instantaneously by buy orders from the hungry bulls. It almost felt like someone was preventing the market from going down tod. Who knows may be the fed, a another big institution from a foreign country, a group of large banks, etc. are defending certain levels of the indices for their vested interests. The $ (USD) has been in a similar uptrend since Aug last year and could be a partial catalyst for the current move in the equities.

Despite the appearance of a fierce upward move in  the indices, it has been a gradual grind, slowly drifting upwards in small increments. On several days of the current vertical up move, its hard to tell, if the market really closed up or down? One of my observation has been the persistence of low volatility over this period.

From a technician point of view the market is way over extended above its (most commonly used) 20, 50, 200 DMA's and is ready for a pullback any time.

Tuesday, February 21, 2017

Relationship between $ (USD) and the US stock market

If we compare the US Dollar Index (USDX), an index that tracks the value of the U.S. dollar against six other major currencies, and the value of the Dow Jones Industrial Average (DJIA), Nasdaq and S&P 500 over a 20-year period, the correlation coefficient calculated for the USDX versus the DJIA, Nasdaq and S&P 500, is 0.35, 0.39 and 0.38, respectively. Note that all of the coefficients are positive, which means that as the value of the U.S. dollar increases, so do the stock indexes, but only by a certain amount. Notice also that each coefficient is below 0.4, which means that only about 35% to 40% of the stock indexes' movements are associated with the movement of the U.S. dollar.

Read more: What is the correlation between American stock prices and the value of the U.S. dollar? | Investopedia
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Saturday, February 4, 2017

Thursday, February 2, 2017

Amazon's Q4 2016 earnings

Amazon.Com (AMZN) reported 4th Quarter December 2016 earnings of $1.54 per share on revenue of $43.7 billion. The consensus earnings estimate was $1.40 per share on revenue of $44.8 billion. The Earnings Whisper number was $1.44 per share. Revenue grew 22.4% on a year-over-year basis.

The company said it expects first quarter revenue of $33.25 billion to $35.75 billion. The current consensus revenue estimate is $35.83 billion for the quarter ending March 31, 2017.