Market Talk

Google Ad

Where have we been and where are we going? Join our weekly market thread on Traders Community...

FEAR NOT Brave Investors

 Trade War Pandoras Box

Strange Time But remember The Joker once served as the Iranian ambassador for the United Nations.

Trade Wars, Consumers and G7

The Week That Was:

The week saw better PMI reports for the most part in Europe, though coming off a low base. In the US we saw a worse than expected report however, back under the important 50. The US also reported another weak housing report. Over in Germany the Bundesbank said they didn't believe more easing was necessary and that more than likely we are at the bottom of this cycle.

All eyes were than on Powell at Jackson Hole, however before hand markets were roiled by China announcing retaliatory tariffs against the U.S. An aggressive announcement, the timing was right in front of Fed Chairman Powell & the opening of G-7 in France. How was POTUS meant to react? Was the intent to unravel the U.S. ahead of G7?

Markets rallied back as Powell sounded dovish but never promised cuts and mentioned the trade wars. How dare he? POTUS sent an inflammatory question “who is the bigger enemy” — China President Xi Jinping or Fed Chairman Jerome Powell? Then it hit the fan, Trump tweeted a response to China's move, ordering US firms to look outside China for replacements. The markets collapsed with the Dow now down 6% from it's high and oil under $54. After the close POTUS announced an incease in Tariffs to China. Now President Trumpo is off to spread goodwill at the G-7 this weekend.

Jerome Powel is working on his playbook for next week. The market had priced in 100% for a 25 bp and 40% for a 50 bp Fed cut. The flight to safety reflecting both fear and trying to capture falling yields, the bond market is all one way on fear at this point.

We still have confusion with the whole mess that is Brexit and Italian elections are back in the picture. Negative rates, as foolish as history will remember them are the theme of the moment.

Still the market wants to believe the trade war is constructive, we have warned for over a year about the nonsense of the trade war nearing an end. Very simply you have two different cultures two different political systems and shaming doesn't do well in either.

This is a market full of players that think its different this time, sure its different negative rates all around, trillions of worthless debt, unstable politics and Central Bankers putting their thumb in their mouths and seeing which way the wind blows. The fear of missing out and blind partisan politcs creates intertesting bed fellows. Be alert and put your ear plugs in and watch the whole spectrum its all related, geopolitical, debt markets, commodities, stocks, herds, greed and entitlement,

The spectre of Deutschbank overhangs Europe as does the new British PM, Boris Johnson. Their are other spectres out their we just don;t know it, or want to.

"Negative yields on long-dated government securities are more reflective of distorted market conditions than of stronger sovereign credit profiles, Fitch Ratings says. Lower interest service costs support sovereign creditworthiness, but this must be weighed against the impact of the economic conditions leading to lower yields and historically high government debt levels in a number of countries.- Fitch"

The indices are gamed by a few high delta stocks leading the way with massive leverage and a game of chicken on daily.

We remind you to stay on your toes, ad nauseum we repeat; In this surreal world that market prices can only go up, with bizzare acceptance that we can't go down and you are a fool if you think otherwise. We have had mixed economic data, no concrete decision on the China and EU trade wars and no decision on Brexit. Here we are (see what ya wanna see).

The Week Ahead

Another big week for potential volatility, led by trade wars and rate theories. In the U.S. will be watching data that can help us gauge trade war fallout. We have Monday’s durable goods, Tuesday’s consumer confidence, and Friday’s personal income and spending data which includes the PCE deflator, the Fed’s preferred inflation indicator.

To repeat AGAIN ...With the trade war, most analysts still say a US-China trade deal will remain out of reach regardless for some time. On repeat "Again the issue is the disconnect between the story telling about the China deal and inconclusion between the Tories and Labor in the UK. What could go wrong?"

It is now over five months since the latest trade deal between the United States with China deadline of March 1. The White house said it needs more time, then turned around and slapped more tariffs on and said hey we are still talking.  Are we the only one that sees the constant reset to keep markets elevated? If you have half a non partisan brain it should be all pretty clear the great game going on.

For emerging markets the still high US dollar means the Fragile 5 continue to shake. Argentina and Turkey are red letter risks. Voters will be going to the polls in Poland, Argentina, Indonesia, the Philippines and Thailand this year.

Over $4 trillion of EM debt matures by the end of 2020, of which around a third is denominated in foreign currency, according to the Institute of International Finance. Nevertheless Banks are telling investors to buy, buy, buy, who is selling you should ask? 

If you wanted to play in the big room at Vegas, you are living it. Understand risk and the madness of crowds for your own sanity and wealth.

Focus on yourself and what YOU CAN INFLUENCE, set your trading plan and goals in be set for 2019. One suspects it will be a year long Groundhog day for Trump, the GOP and the Democrats. We still have China and the wars.

Earnings last week included Estee LauderMedtronic, Kohls Corp, Home Depot, TJX Companies, Analog Devices, Lowe's Companies, Target, Nordstrom, Synopsys, Keysight Technologies, L BrandsHormel Foods, Ross Stores, Salesforce.Com, HP Inc, Intuit, Gap Inc, Foot Locke

We start off on Monday with: Caleres

Tuesday Earnings Include: Autodesk, Hewlett Packard Enterprises, Bank of Nova Scotia, Bank of Montreal, JM Smucker, Catalent, Eaton Vance, Momo

Wednesday Earnings Include: Brown-Forman, Tiffany, Box, Five Below, Guess, H&R Block, Shoe Carnival, Greif, PVH

Thursday Earnings Include: Best Buy, Ulta Beauty, Dell, Workday, Cooper Cos, Marvell Tech, American Outdoor Brands, Toronto-Dominion Bank, Dollar General, Dollar Tree, Abercrombie & Fitch, Hain Celestial, Sanderson Farms

Friday Earnings Include: Campbell Soup, Yintech Investment

-comment section below data-

Geopolitical Tinderbox Radar

Trade Imbalances IMF

Italy CDS
Turkey Geopolitical

Last Week's Big Stories

The Week That Was - Last Weeks Recap


Stock Markets

Biggest Stock Winners and Losers Last Week*

 US Top 5 Stocks D 8 23 19

Which Stocks Moved US ETF's Last Week

 US Top 5 ETF Stocks D 8 23 19

US Stock Indices Performance

There was a reason why we kept harping on about this risk: The performance in shares of small-cap companies which are domestically focused than the large-cap firms is a concern for the optimism in the markets, belies the ATH optimism. The small-cap Russell 2000 index had gained 16.6% for the year, which has underperformed the benchmark S&P 500 index which had risen over 19.5%. Whereas the DJIA, NDX and SPX have marked new records highs, it remained 9.7% below its August 2018 high.

 US Performance W 8 23 19

S&P 500

The $SPX continues to trade off our daily speed lines like clock work with this week's low another perfect test. Last week we closed the week out at the 50% retest and then went to the 61.8% before reversing above the Tenkan and Kijun. Best alternatives are a (ii) of wave V higher, a A of a larger 2 or this is i of something more powerful down. There is the alernative that the high was a B Plus and the recent low is a C also. Speed and channel lines in tune with algo calibration curve.

MW SPX D 8 23 19

On the weekly SPX we see chaotic moves, spitting the Kijun and closing just under it and tenkan. We have a series of vibrations (blue lines) with Murrey Math confluence. Tenkan and 50 wma with a sharply climbing Kijun flattening with the cloud and channel much lower.

 MW SPX W 8 23 19

Apple $AAPL

 MW AAPL W 8 23 19

Amazon $AMZN

 MW AMZN W 8 23 19

Fixed Interest

10 Year Treasury Note

MW TNX W 8 23 19 

Energy and Commodities

US Crude Oil (WTI)

WTI spat the channel and 50dma hard after testing the cloud then flew through the kijun and daily tenkan in a sharp 1-2. It did hold the median line at the low and 2/8, Signalling stairstepping ahead.  Finished inside the outer daily downtrend channel well under the cloud base under Kijun and 50 dma adding pressure. Watch for spits now with fear in the pricing.

 MW WTI D 8 23 19

WTI again finished the week under the weekly Kijun, 50wma (green) and Tenkan under the cloud after rejecting the weekly channlel and the kijun and 50 dma crossing over fueling strong impulse higher. Last week we said  Key From Last Week " Expect more work and volatility. Watch Murrey confluence with the cloud acting as support, failure."

 MW WTI W 8 23 19

US Natural Gas (Henry Hub)

Natural Gas failed at the tenkan (orange) and Kijun well under 50 dma. Needs to get above for a rally Despite record low futures longs the fails are swift. The1-2 set up retested the flag has potential but flailing.

 MW NG D 8 23 19

Natural Gas nothing new; weekly finished with a green spug after lower lows, and was again rejected at the tenkan, still much work to do with tenkan and channel above, its all about the weekly channel and the tenkan 

MW NG W 8 23 19

Baltic Dry Index (BDI)

 MW BDI W 8 24 19

Currency Markets

Australian Dollar - AUDUSD

The Aussie dollar continues under pressure since it sold off Kijun and daily cloud. It is in oversold at -1/8 Murrey Math in bottom outer weekly channel but much repair work to be done into the cloud to get a meaningful bounce in.

MW AUSUSD W 8 23 19 

New Zealand Dollar - NZDUSD

The Kiwi continues to battle, accelerated weakness since the RBNZ cut, tested support at the channel and Fibs but finished week back there, above tenkan holds it back. Chikou confluence over the downward channel is rebalancing.  

 MW NZDUSD D 8 23 19

Canadian Dollar - USDCAD

The USDCAD bounce struggles at top of cloud with multiple spitting the Kijun after found support at the tenkan. Loonie continues to find balance in the cloud. The tenkan is now seen as the pivot aspect. Support is cloud base 

 MW USDCAD W 8 23 19


Euro remains in the long weekly channel pennant back testing lows after rejected by Kijun and Tenkan. EUR remains a battle between EURJPY and EURCHF selling with EURGBP joining in this week.

 MW EURUSD W 8 23 19

EuroPound - EURGBP

EURGBP reversed perfectly at the chikou and Murrey 6/8 (+2/8 recalc) to finish back at channel break retest but under Tenkan, Below 50 wma, Kijun & top of channel support. 

MW EURGBP W 8 23 19 

Japanese Yen - USDJPY

The dollar yen recovery was shot in a day on trade war before the tenkan. Still firmly in the channel needing to break the tenkan to get legs higher. Yen buying continued on the crosses, EURJPY and AUDJPY taking away the cloud twist that drew the dollar up.

 MW USDJPY W 8 23 19

Mexican Peso USDMXN

Mexican peso weakened further this week with the Argentina rout after Mexico surprise rate cut It closed over Kijun and tenkan. USDMXN is rebalancing if chikou. Trade Wars not helping Peso.

MW USDMXN D 8 23 19

Turkish Lire USDTRY

The USD Turkish Lire caught uo with the emerging market downdraft after the coiling between daily Kijun and tenkan brought impulse. The downtrend formed since May break ran into the cloud for now.

 MW USDTRY D 8 23 19


Bitcoin testing bottom of pennant thrown back at the 61.8% of the major move at pace once to the 38% and tenkan confluence to bounce to the 50%. Use your MM rules as algos control the herd here, support is the cloud and tenkan, be wary of sharp ABC, 1-2 moves.

 MW BTC W 8 23 19

The Week Ahead

Key US Economic and Central Bank Events This Week

Sun Aug 25, 2019

  • 18:45 NZD Trade Balance (MoM) (Jul)

Monday, Aug 26, 2019

  • All Day Holiday United Kingdom - Summer Bank Holiday
  • 01:00 JPY Leading Index
  • 01:00 SGD Industrial Production (MoM)
  • 03:00 EUR Spanish PPI (YoY)
  • 04:00 EUR German Business Expectations (Aug)
  • 04:00 EUR German Current Assessment (Aug)
  • 04:00 EUR German Ifo Business Climate Index (Aug)
  • 04:30 HKD Trade Balance
  • 08:30 USD Cap Goods Ship Non Defense Ex Air (MoM)
  • 08:30 USD Chicago Fed National Activity (Jul)
  • 08:30 USD Durable Goods Orders (MoM) (Jul)
  • 09:00 EUR French 12-Month BTF Auction
  • 10:30 USD Dallas Fed Mfg Business Index (Aug)
  • 11:30 USD 3-Month Bill Auction
  • 11:30 USD 6-Month Bill Auction
  • 17:00 KRW Consumer Confidence (Aug)
  • 19:50 JPY Corporate Services Price Index (CSPI) (YoY)
  • 21:30 CNY Chinese Industrial Profit (YoY) (Jul)
  • 21:30 CNY Chinese Industrial Profit YTD (Jul)
  • 22:00 AUD RBA Assist Gov Debelle Speaks

Tuesday Aug 27, 2019

  • 01:00 JPY BoJ Core CPI (YoY)
  • 02:00 EUR German GDP (QoQ) (Q2)
  • 02:45 EUR French Business Survey (Aug)
  • 02:45 EUR French Consumer Confidence (Aug)
  • 02:45 EUR French Industrial Investments (Q3)
  • 04:30 GBP Gross Mortgage Approvals
  • 05:40 EUR German 2-Year Schatz Auction
  • 06:00 EUR France Jobseekers Total
  • 08:55 USD Redbook (MoM)
  • 09:00 USD House Price Index (MoM) (Jun)
  • 09:00 USD S&P/CS HPI Composite - 20 s.a. (MoM) (Jun)
  • 10:00 USD CB Consumer Confidence (Aug)
  • 10:00 USD Richmond Manufacturing Index (Aug)
  • 10:00 USD Richmond Services Index (Aug)
  • 10:30 USD Dallas Fed Services Revenues (Aug)
  • 10:30 USD Texas Services Sector Outlook (Aug)
  • 13:00 USD 2-Year Note Auction
  • 16:30 USD API Weekly Crude Oil Stock
  • 19:00 GBP BRC Shop Price Index (YoY)
  • 21:30 AUD Construction Work Done (QoQ) (Q2))

Wednesday, Aug 28, 2019

  • Tentative GBP Nationwide HPI (MoM)
  • 02:00 EUR German Import Price Index (MoM) (Jul)
  • 02:00 EUR German Import Price Index (YoY) (Jul)
  • 02:00 EUR GfK German Consumer Climate (Sep)
  • 04:00 EUR Italian Business Confidence (Aug)
  • 04:00 EUR Italian Consumer Confidence (Aug)
  • 04:00 CHF ZEW Expectations (Aug)
  • 04:00 EUR M3 Money Supply (YoY) (Jul)
  • 05:40 EUR German 10-Year Bund Auction
  • 07:00 USD MBA 30-Year Mortgage Rate
  • 07:00 USD MBA Mortgage Applications (WoW)
  • 07:00 USD MBA Purchase Index
  • 07:00 USD Mortgage Market Index
  • 07:00 USD Mortgage Refinance Index
  • 10:30 USD Crude Oil Inventories
  • 13:00 USD 5-Year Note Auction
  • 17:00 KRW Manufacturing BSI Index (Sep)
  • 19:50 JPY Foreign Bonds Buying
  • 21:00 NZD ANZ Business Confidence (Aug)
  • 21:00 NZD NBNZ Own Activity (Aug)
  • 21:30 AUD Building Capital Expenditure (MoM) (Q2)
  • 21:30 AUD Plant/Machinery Capital Expenditure (QoQ) (Q2)
  • 21:30 AUD Private New Capital Expenditure (QoQ) (Q2)
  • 21:30 JPY BoJ Board Member Suzuki Speaks

Thursday Aug 29, 2019

  • 01:00 JPY Household Confidence (Aug)
  • 02:30 CHF Employment Level (Q2)
  • 02:45 EUR French Consumer Spending (MoM) (Jul)
  • 02:45 EUR French GDP (QoQ) (Q1)
  • 03:00 EUR Spanish HICP (MoM)
  • 03:55 EUR German Employment n.s.a. (Aug)
  • 04:00 EUR Italian Industrial New Orders (MoM) (Jun)
  • 04:00 EUR Italian Industrial Sales (MoM) (Jun)
  • 05:00 EUR Italian PPI (MoM) (Jul)
  • 05:00 EUR Business and Consumer Survey (Aug)
  • 05:00 EUR Business Climate (Aug)
  • 05:00 EUR Consumer Confidence (Aug)
  • 05:00 EUR Consumer Inflation Expectation (Aug)
  • 05:00 EUR Selling Price Expectations (Aug)
  • 05:00 EUR Services Sentiment (Aug)
  • 05:00 EUR Industrial Sentiment (Aug)
  • 05:30 ZAR PPI (MoM) (Jul)
  • 05:45 EUR Italian 10-Year BTP Auction
  • 05:45 EUR Italian 5-Year BTP Auction
  • 06:15 EUR Spanish Business Confidence
  • 08:00 EUR German CPI (MoM) (Aug)
  • 08:00 EUR German HICP (MoM) (Aug)
  • 08:30 USD Continuing Jobless Claims
  • 08:30 USD Core PCE Prices 08:30 USD Corporate Profits (QoQ) (Q2)
  • 08:30 USD GDP (QoQ) (Q2) 08:30 USD GDP Price Index (QoQ) (Q2)
  • 08:30 USD Goods Trade Balance (Jul)
  • 08:30 USD Initial Jobless Claims
  • 08:30 USD Jobless Claims 4-Week Avg.
  • 08:30 USD Real Consumer Spending (Q2)
  • 08:30 USD Retail Inventories Ex Auto (Jul)
  • 08:30 USD Wholesale Inventories (MoM)
  • 08:30 CAD Current Account (Q2)
  • 10:00 USD Pending Home Sales (MoM) (Jul)
  • 10:30 USD Natural Gas Storage
  • 11:30 USD 4-Week Bill Auction
  • 11:30 USD 8-Week Bill Auction
  • 13:00 USD 7-Year Note Auction
  • 18:45 NZD Building Consents (MoM) (Jul)
  • 19:00 KRW Industrial Production (MoM) (Jul)
  • 19:00 KRW Retail Sales (MoM)
  • 19:00 KRW Service Sector Output (MoM) (Jul)
  • 19:01 GBP GfK Consumer Confidence (Aug)
  • 19:30 JPY Jobs/applications ratio (Jul)
  • 19:30 JPY Tokyo CPI (YoY) (Aug)
  • 19:30 JPY Unemployment Rate (Jul)
  • 19:50 JPY Industrial Production (MoM) (Jul)
  • 19:50 JPY Retail Sales (YoY) (Jul)
  • 21:00 KRW Interest Rate Decision (Aug)
  • Tentative AUD HIA New Home Sales (MoM)
  • 21:30 AUD Building Approvals (MoM) (Jul)
  • 21:30 AUD Housing Credit (Jul)
  • 21:30 AUD Private House Approvals (Jul)
  • 21:30 AUD Private Sector Credit (MoM) (Jul)
  • 22:00 SGD Bank Lending

Friday Aug 30, 2019

  • Tentative INR RBI Monetary and Credit Information Review
  • 01:00 JPY Construction Orders (YoY)
  • 02:00 GBP Nationwide HPI (YoY)
  • 02:00 EUR German Retail Sales (MoM) (Jul)
  • 02:45 EUR French CPI (MoM)
  • 02:45 EUR French Government Budget Balance (Jul)
  • 02:45 EUR French HICP (MoM)
  • 02:45 EUR French PPI (MoM) (Jul)
  • 03:00 CHF KOF Leading Indicators (Aug)
  • 03:00 EUR Spanish Retail Sales (YoY) (Jul)
  • 04:00 EUR Italian Monthly Unemployment Rate (Jul)
  • 04:00 EUR Spanish Current account (Jun)
  • 04:30 GBP BoE Consumer Credit (Jul)
  • 04:30 GBP Mortgage Approvals (Jul)
  • 04:30 GBP Mortgage Lending (Jul)
  • 04:30 GBP Net Lending to Individuals
  • 05:00 EUR Italian CPI (MoM) (Aug)
  • 05:00 EUR Italian HICP (MoM) (Aug)
  • 05:00 EUR CPI (Aug)
  • 05:00 EUR Unemployment Rate (Jul)
  • 06:00 EUR Italian GDP (QoQ) (Q2)
  • 08:30 USD Core PCE Price Index (MoM) (Jul)
  • 08:30 USD PCE Deflator (MoM)
  • 08:30 USD PCE price index (MoM)
  • 08:30 USD Personal Income (MoM) (Jul)
  • 08:30 USD Personal Spending (MoM) (Jul)
  • 08:30 USD Real Personal Consumption (MoM) (Jul)
  • 08:30 CAD GDP Implicit Price (QoQ) (Q2)
  • 08:30 CAD GDP (MoM) (Jun)
  • 08:30 CAD IPPI (YoY) (Jul)
  • 08:30 CAD IPPI (MoM) (Jul)
  • 08:30 CAD RMPI (MoM) (Jul)
  • 09:45 USD Chicago PMI (Aug)
  • 10:00 USD Michigan Consumer Sentiment (Aug)
  • 11:00 CAD Budget Balance (Jun)
  • 13:00 USD U.S. Baker Hughes Oil Rig Count
  • 15:30 USD CFTC speculative net positions
  • 21:00 CNY Chinese Composite PMI (Aug)
  • 21:00 CNY Manufacturing PMI (Aug)
  • 21:00 CNY Non-Manufacturing PMI (Aug)


Stock Buyback Watch

Via Emad Mnati @EmadMnati and MarketBeat

Stock BuyBAcks 1

Stock BuyBAcks 2



Note these charts, opinons news and estimates and times are subject to change and for indication only. Trade and invest at your own risk.

Trade Smart!

Log in to comment
Discuss this article in the forums (26 replies).

Google ads