After a rough day, I figure people are wondering where the market is going tomorrow. I've been trying to learn how to use macro indicators to predict the market, as inspired by GM.
First, pull up marketwatch and check out the section in the top left.
US Europe Asia FX Rates Futures
Under US, we can see money is leaving oil, after retreating there during Wednesday's move. Precious metals are on the rise, continuing to be a shelter for cash. Where is that money from Oil going to go though?
Next we look at FX, and look at the strength of the US dollar. We can see that it continues to weaken, hinting again that money is leaving the market/USD. Not a good sign for the market.
Next we look at Rates and check the US 10yr yield curve. When it is gaining, that means that money is leaving the bond market, which means it's going somewhere else (the market?). When the yield curve turns down, that means money is fleeing into the bonds from somewhere else. We can see the brief dip in bonds has already passed, indicating money is not staying in bonds.
Now we move onto Futures, which represent speculation on price movement of an asset. Tuesday night, we saw a huge dip in the futures of the entire U.S. stock market, signaling a bad day for the bulls. Now that that has passed, speculation is back to normal, slowly gaining.
Lastly we can look at the VIX, which is the volatility index. It isn't a leading indicator, like everything else covered above, but it can show us a trend. If recent news seems relevant, either good or bad for the health of the economy, and no spike in VIX has occurred for a while, consider a large move (good or bad based on the news) imminent and hedge appropriately.
Is this analysis correct or not? I'm new to this but trying to wrap my head around understanding this crazy market.
@Marketreport, I'm asking you specifically.