Howdy folks. You can definitely tell a holiday and holiday-weekend (sort of) are approaching. Trading activity is already starting to fade. Tis the season - people have turkey on their minds. If you thought today was slow, wait until Wednesday and Friday.
That said, do know that we will be publishing both of those days. There may not be a great deal to talk about, but you can bet if it's worth discussing, we'll be hashing it out. We'll also take some time on those two days to take a look at some things we don't always have time to talk about. I've got some sector-analysis and economic analysis on my mind, and that would be a good chance to get it on the table. I'm also looking to give you guys a final assessment of third quarter's overall earnings.
In any case, before I forget, a couple of our Featured Stocks at the site will be attending next week's LD Micro Cap Conference in Los Angeles. In fact, both will be making presentations.
I'm talking about Barfresh Food Group (BRFH) and Empire Global (EMGL). James Brumley has all the scheduling specifics here.
I don't know how many of you have ever been to a small cap investor conference, but if you haven't, they're pretty cool. Some of them even facilitate investor meetings with companies attending the conference, which lets individual shareholders like you really get to know a company by asking tough questions... giving you the kind of insight you just can't get from a company's website or official filings. If you can get to the Los Angeles area any time at all in the middle of next week, I highly encourage you to see what Barfresh and Empire Global have to say.
Anyway, I think the last time we looked at the U.S. Dollar Index it was rallying pretty firmly. That was a while back though, so not only is an update merited, but an update would be timely now because it seems like - to me anyway - the greenback could finally be ready to roll over. It's certainly at a spot where it's likely.
Bottom line? T he chart of the U.S. Dollar Index below seems to be slowing down from its early November surge. In fact, I can't help but wonder if it's already topped out right around 100, where it peaked in April.
I'm always a little hesitant to treat the chart of a currency like a stock chart, since currency is impacted by so many other factors that aren't necessarily static or consistent the way a stock chart tends to move in predictable, rational technical patterns. The more I watch the greenback move though, the more I'm convinced it actually does move with respect to its history.
I suppose that makes sense. When you think about it, a chart is simply a history of the market's changing opinion of a stock or market, or in this case, a currency, and opinions tend to ebb and flow in consistent patterns, which drive, as well as are driven by, those other factors.
In any case, know that if the dollar is going to roll over, it's at the ideal place to do so.
Unfortunately, the dollar's damage has already been done for the fourth quarter.
You may have heard more than a few times as we listened to third quarter earnings numbers that the strength of the U.S. dollar really hurt earnings of U.S. companies that rely heavily on overseas sales. Well, the dollar has spent the bulk of Q4 so far at prices well above any seen in the third quarter. I fear even if the U.S. dollar rolls over now, the toll has already been taken. It could prove to be a huge drag on fourth quarter earnings.
As for the market, stocks are stagnating right where they should, and right where it's most annoying to traders... smack dab in between its Bollinger bands, and resting right on top of its 20-day moving average line. It couldn't be any more non-committal. That's just the way this week is. This is true of the S&P 500 as well as the NASDAQ Composite, though just for the sake of time and room we're only showing you the NASDAQ's chart today.
There's something else you'll see on the chart I have to credit John Monroe over at the Elite Opportunity for... a rising support line (dashed) that extends back to August's low.
I partially poached the idea from John so I'm not going to borrow his thesis as well. But, you can glean the idea from the chart alone - this is a line you'll want to watch closely as November transitions into December. If the market is going to stumble, that line could end up becoming the make-or-break level. This assumes, of course, the lower Bollinger band falls or the NASDAQ breaks firmly below it with a sharp plunge.
On that note, I'll be the first to concede I'd like to see a sharp, one or two day plunge sooner than later to clear the decks so we have room for a Santa Claus rally. But, we'll have that discussion another time. For now, I think John's got the best bead on where things are going for stocks in the near term, even if things remain stagnant this week.
I suggest you take your upcoming downtime to sign up for the Elite Opportunity and scour through some of the recent editions (all of which are accessible as archives to EO members). Not only will you get up to speed on what John's thinking, you'll get up to speed on what's likely coming. He's turned market handicapping into a fine art and a precise science. In fact, he's "scary good" at it.