October 18, 2021
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Top Stories
Technical analyst Ian Culley points out that copper is "a great leading economic indicator and critical to the global growth narrative," and notes that copper futures are returning to highs not seen since 2011, with a 10% gain in a week. "Copper's explosive move confirmed what the rest of the market has been implying for weeks now…This is the beginning of the next leg higher within a cyclical bull market," he contends.
Full Story: All Star Charts (10/15) 
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Better-than-expected bank earnings and inflation data this week propelled the S&P 500 up 1.7% Thursday, its biggest one-day increase since March, followed with more gains on Friday to record its best week since July. The growth could be an indication that investors are shrugging off concerns over continued price increases and the Federal Reserve's plan to taper its pandemic support efforts.
Full Story: The New York Times (10/14),  The Associated Press (10/15) 
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The technicals of sustainable investing
ESG investing is all the rage. However, aspects can polarize opinion. Take Tesla...you can either love it or hate it depending on which analytics you use. Here, we explore the intersection of technical/fundamental of sustainable investing. 6 minute read.
Industry News
Traders and investors are starting to consider whether the Federal Reserve will be forced to raise interest rates in response to a steady stream of higher-than-expected inflation data. The central bank describes the elevated inflation rate as "transitory," but the consumer price index has had year-on-year readings above 5% for five consecutive months.
Full Story: MarketWatch (tiered subscription model) (10/13),  Reuters (10/13),  The Wall Street Journal (10/13) 
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With the onward rise in bond yields raising the possibility of increased inflation and a subsequent rate hike, technical analyst Chris Kimble notes a particularly worrisome development on the 30-year Treasury yields monthly chart. It is currently shaping a bullish inverse head and shoulders pattern which has yet to form fully, but if it completes the pattern Kimble observes "it would have major consequences for the US economy, financial markets, and [the] Federal Reserve."
Full Story: See It Market (10/17) 
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Strategists at Goldman Sachs and JPMorgan Chase have advised investors to set aside concerns of imminent stagflation and to be confident in buying equities. "Despite near-term uncertainty, we expect the equity market will continue to rally as investors gain confidence that the current pace of inflation is transitory," according to a note from David Kostin and other Goldman strategists. Both teams of strategists have advised clients to buy any dips.
Full Story: BNN Bloomberg (Canada) (10/11) 
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Microsoft has been on an uptrend throughout this year, apart from one brief dip below its 50-day moving average, and a recent breach of resistance which took it above its highs of August and September "looks extremely promising," says technical analyst Bruce Kamich, CMT. With positive signs from indicators including the Moving Average Convergence Divergence oscillator and weekly Japanese candlestick chart, Kamich says the stock has capacity for a rise well beyond its record high to $345.
Full Story: Real Money (tiered subscription model) (10/15) 
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Is it game over for Chinese tech?
Chinese tech has come under fire in recent months. Is it game over? In this 5-minute read, Schroders local expert discusses the 4 reasons the government is stepping in, and why there's more to come from the second largest global economy.
Investor Behavior
The US Securities and Exchange Commission is expected to rule on four futures-based bitcoin exchange-traded fund applications over the next two weeks and investors are betting the SEC will approve a bitcoin ETF, which has contributed to bitcoin's 25% rise this month. Analysts predict that there is a ready futures-based ETF market due to institutional investors' interest in cryptoassets.
Full Story: The Wall Street Journal (10/14),  BNN Bloomberg (Canada) (10/14) 
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Market Structure and Regulation
The Federal Reserve's regional bank presidents have reportedly sent a letter to Sen. Elizabeth Warren, D- Mass., who has been an outspoken advocate of a comprehensive review of ethics at the Fed, offering assurances that they welcome the review and will comply with its findings fully. The letter was signed by all regional presidents.
Full Story: Reuters (10/14) 
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International Markets
Japanese equities have suffered a 7% drop since September, but the benchmark Topix index rose sharply on Friday after the parliament was formally dissolved ahead of the national election on Oct. 31, and technical analyst Eiji Kinouchi says "the market is anticipating the dissolution will serve as a trigger for a turnaround in shares." Records show a strong rise for the Topix between dissolution and polling day in all the last five elections since 2005, by as much as 10.4%.
Full Story: BNN Bloomberg (Canada) (10/13),  Xinhua News Agency (China) (10/15) 
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The US Dollar Index has been rising since June when it broke resistance at 90.00. However, technical analyst Tammy Da Costa notes a red candle on its chart this month, which she says "may be an indication that further downside may be on the cards unless bulls can reclaim the systemic, prominent trend." She adds that 95.843 is likely to prove a strong line of resistance against further upward movement.
Full Story: DailyFX (10/17) 
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Association News
The trading world has more than its share of rags to riches stories which is why, perhaps, more people are attracted to it. What is not visible behind these stories is the effort and sacrifice needed to come out as a winner. Sovit Manjani was in his late 30s when he set out to became a systems trader. He talks of his struggles, strategy and the four pillars of his success.
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Some misconceptions about technical analysis are based on education and training. Other myths are based on experience. For example, the incorrect use of technical indicators often leads to losses. That doesn't mean the method is necessarily bad - possibly the person just needs more practice and training. Other myths are perpetrated by marketing, promising overnight riches if a simple indicator is bought and used. Rarely is it that easy.
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