From the desk of Joe Rios
Friday’s strong US employment report sent the broad markets in a frenzy with the Volatility Index (VIX) spiking 5.7%. Most markets turned red led by Gold -2.3%, US 30 Yr Bond -2.0%, Crude Oil -1.9%, the Euro -1.6% and the Dow Jones -1.4%. The beneficiary was the US Dollar which rose 1.4%. Good news is bad news is how investors reacted from the stronger than expected report, seen as a gauge for the Federal Reserve’s timing in raising interest rates. In contrast, the European Central Bank’s expected launch of its new bond buying program set to begin Monday March 8th helped to ignite rotation flows to the US Dollar. As mentioned in a recent writing in The Week Ahead, the divergence in the stock markets between Japan and Europe versus the US has continued. European bourses lead the way gaining 10.2%, Japan 9.5% and the US only 0.9%, all in local currencies. I will keep an eye on these markets and their relationship in the week ahead.
We have a light economic calendar, therefore it will be prudent to pay close attention to the market’s message using market dynamics, especially if correlations continue to tighten. For that reason I will focus on rotation flows with a strong emphasis on the currency market. The Euro dropped -6.6% in January followed by consolidation in February to drop again -3.1% in the first week of March. The price action was a classic box pattern, which we have been covering in detail during our recent instructional training workshops. I will continue to search for this type of tactical set ups, they usually prove to be prudent when volatility spikes followed by a lack of economic data.
Don’t miss this week’s workshop class, ROTATION FLOWS: How to profit from it NOW. Register early, the last few workshops reached maximum attendance capacity and some were denied access, register here.
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Monday through Friday from at 7:30 to 10:30 AM ET
The Trading Room® TradeLAB live sessions conducted online by the RiosQuant team offer a pragmatic, real world perspective of trading the global markets in real time for the active trader. RiosQuant global trader Agustin Criado kicks off the room with pre-market analysis and trade set ups. Watch, listen and learn from Agustin as he shows you step-by-step how to use innovative tools and methods for today’s market environment. You will also hear insights from RiosQuant founder and strategy developer Joe Rios, a 25 year Wall Street insider and recognized leader in electronic trading. Register early so you don’t miss out. We’ll see you in the TradeLAB!
The RQ Workshop Training – ROTATION FLOWS: How to profit from it in the week ahead.
Tuesday – Starting at 8:00 pm and ending at 9:00 pm ET.
All Day EUR Euro Group Meetings
8:30 PM AUD NAB Business Confidence
9:30 PM CNY CPI
10:35 AM GBP BOE Gov. Carney Speaks
1:30 AM CNY Industrial Production
10:30 AM Crude Oil Inventories
4:00 PM NZD RBNZ Rate Statement
8:10 PM NZD RBNZ Gov. Wheeler Speaks
8:30 PM AUD Employment Change
8:30 AM USD Retail Sales And Unemployment Claims
8:45 AM GBP BOE Gov. Carney Speaks
10:30 AM Natural Gas Storage
8:30 AM USD PPI
8:30 AM CAD Employment Change
10:00 AM USD Preliminary UoM Consumer Sentiment