1. Is the Market Betting on TACO?
The stock market is betting on TACO. Let’s see.
Keep in mind, the third quarter is ending in a few days. We get tax-loss selling, window dressing, etc. during the last quarter of the year generally.
So, in case there’s selling in October, expect laggards to get sold hard and winners/“hot names” to catch a bid later in November and December.
Obviously, following this. Will keep updated.
2. Oil Is Driving Yields
Yields on U.S. 10-year Treasuries are below 5% as I write this.
What’s helping? Oil prices are coming down as there’s a lot of hope for TACO and eventually some sort of peace deal.
But this is all very fluid. One post changes the game here. So, be mindful.
If oil/energy issues remain, yields likely go higher, and the odds of something breaking increase.
3. Yen Weakens as the Dollar Reclaims 100
The Japanese yen is starting to depreciate a little again, at around 157 against the dollar.
The Bank of Japan did a rate check recently, so let’s see if there’s another intervention coming.
While we are at it, have you looked at the Dollar Index lately? It’s back above 100, above both its 50-day moving average and 200-day moving average.
4. Gold Is Back at $4,300
Gold is back to testing $4,300.
You see, on a lot of good news and a rising dollar, gold might face some headwinds.
Time will tell more.
Seasonally speaking, over the past 10 years or so, October has been positive for gold, but the average return in November has been negative. In December, a decent opportunity comes between mid-to-end of the month.
Miners: they had a very big August. If gold does sell, miners get sold harder.
5. Bitcoin, Canada & the Red Sea
As said before: if there was a break, Bitcoin tests $100K. Charts are looking very constructive. Keep in mind, the crypto world has been looking for a narrative.
The Canadian dollar is taking a beating against the USD — oil prices are also likely impacting this. Also, Canada would appreciate higher oil prices (would suck for consumers but would make GDP look great).
Diesel prices soaring is something that will bite.
The U.K. helping Saudi Arabia bomb Yemen. Developing, worth watching, as the Red Sea could get choked. More countries getting involved.