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FEAR NOT Brave Investors

Fed Powell Doling Out Money

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

Trade Wars, Oil and The Fed

The Week That Was:

This week was last week on steriods with regard to lack of fear and the high valuation of stocks and number of weak points in the global economy, right back to Gordon Gekko and "Greed is Good". There is more a fear of missing out then of loss. The market seems oblivious to the risk of the Federal Reserve’s policy meeting, expecting the central bank to approve another quarter-point rate cut at the conclusion of its policy meeting Wednesday.

On Saturday morning we got an unexpected shock to global stability when Houthi rebels from Yemen launched successful drone attacks on the world's biggest petroleum processing facility in Saudi Arabia. Reuters reports that up to 5 mbpd of production has been impacted, half of Saudi Arabia's output. Fires reportedly under control but damages unclear and the threat of war is real.

POTUS has been as unpresidential as it gets in the past week calling the Fed boneheads and wants rates at zero and negative. Yet the stockmarkets are at record highs and the PPI core is higher, while yes the New York Fed year-ahead inflation expectation fell to a series low, even consumer sentiment was up. Chairman Jerome Powell is in a position, not of his choice, where he may put his foot down about an independant Fed and the need to maintain ammunition. After all the trade war isn't his doing it was the man's doing who screams at him and calls him a bonehead.  Meanwhile the ECB cut it's deposit facility rate 10 bps and is reintroducing QE options. This set POTUS on another anti Fed rant.

The U.S. started a 15% tariff on about $110 billion in apparel, footwear and other Chinese imports last Sunday, with same duty on the balance of almost $300 billion in toys, phones and laptops and other products delayed until Dec. 15. The levy is increasing on that already in effect on $250 billion in other Chinese goods to 30% from 25% starting Oct. 1, the 70th anniversary of the founding of the People's Republic of China.

Given the history, markets seem overly optimistic about trade, some would say negligently. 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.

We still have confusion with the whole mess that is Brexit though Italy's political situation improved. Negative rates, as foolish as history will remember them are the theme of the moment.

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 a No Deal Brexit looking more likely. Here we are (see what ya wanna see).

The Week Ahead

Another big week for potential volatility, led by Iran and Saudi moves, trade wars and rate theories. In the U.S. will be watching data that can help us gauge trade war fallout. Investors will be transfixed by oil prices in reaction to the Saudi attack and recovery and military respsonses. In the U.S, we have a Fed two-day meeting with a Powell presser, Industrial Rosengren and Dallas Fed President Robert Kaplan speaking. Thursday we get central bank policy meetings in Japan, the U.K., Norway, South Africa and Switzerland in the wake of Wednesday’s Fed decision and last week’s stimulus package from the European Central Bank.

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 six 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 high US dollar means the Fragile 5 continue to shake. Argentina and Turkey are red letter risks. Argentina Oct. 27 general election with current President Macri, a free-marketeer came to power in 2015 is expected to lose the general election to Fernandez, whose running mate, populist ex-leader Cristina Fernandez de Kirchner sends chills down the spine of global investors and big business. Voters will also be going to the polls in Poland,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 U.S.trade wars.

Earnings last week included; Ctrip.com (CTRP) GameStop (GME), RH (RH), Dave & Buster’s Entertainment (PLAY), ZScaler (ZS)Aurora Cannabis (ACB), Tailored Brands (TLRD)Oracle (ORCL), Kroger (KR), Broadcom (AVGO), Duluth Trading (DLTH)Energy Focus (EFOI

We start off on Monday with: Ra Medical RMED

Tuesday Earnings Include: Federal Express FDX Adobe Systems ADBE Chewy Inc CHWY Cracker Barrel CBRL

Wednesday Earnings Include: General Mills

Thursday Earnings Include: Darden Restaurants

Friday Earnings Include: Collplant CLGN

-comment section below data-

Geopolitical Tinderbox Radar

Trade Imbalances IMF

Italy CDS
Turkey Geopolitical

Last Week's Big Stories

  • Saudi Arabian Aramaco Oil Plant Attacked by Houthi Rebels Affects 5mbpd Production
  • U.S. Took Down Another 5 Oil Rigs From Service, 8 From The Permian
  • Into The Vortex - EIA Reports +78 Bcf in Natural Gas Storage
  • ECB Cuts Deposit Facility Rate 10 bps, Reintroduces QE Options
  • Around The Barrel - Crude Oil Draws -6912k Bbls as Exports Rise and Imports Fall
  • OPEC Monthly Oil Market Report September 2019
  • New York Fed Year-Ahead Inflation Expectation Falls to Series Low

The Week That Was - Last Weeks Recap

Earnings

Stock Markets

Biggest Stock Winners and Losers Last Week*

US Top 5 Stocks D 9 13 19

Which Stocks Moved US ETF's Last Week

 US Top 5 ETF Stocks D 9 13 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 Markets Performance 9 13 2019

S&P 500

The $SPX continues to trade off our daily speed lines interspersed here with the spit to 4/8  fueling the rallyback through the cloud and tenkan and continued though to new highs, the pennant with the bullish euphoria having the hall marks of an ABC double zig zag.through 61.8%.  Note developing pennant (pink) Best alternatives are a (ii) of wave V higher,  A of a larger 2 or this is i of something more powerful down. The alternative that the high was a B Plus and the recent low is a C also played out with new highs. Speed and channel lines in tune with algo calibration curve.


MW SPX D 9 13 19 

On the weekly SPX we see chaotic moves, spitting the Kijun and closing over it and tenkan to test the upper speed lines. We are back at +2/8 Murrey Math recalc confluence. Tenkan and 50 wma with a sharply climbing Kijun flattening with the cloud and channel much lower.

 MW SPX D 9 13 19

Apple $AAPL

 MW AAPL W 9 13 19

Amazon $AMZN

 MW AMZN W 9 13 19

Fixed Interest

10 Year Treasury Note

MW TNX W 9 13 19
 

Energy and Commodities

US Crude Oil (WTI)

WTI spat down again through channel and cloud and through the 50dma, kijun and daily tenkan, Clear battle between specs and hedges. Signalling stairstepping ahead.  Finished inside the outer daily downtrend channel under the cloud. Watch for spits now with fear in the pricing.

 MW WTI D 9 13 19

WTI spat the weekly Kijun, 50wma (green) and a very flat Tenkan under the cloud after rejecting the weekly channel.  Key From Last Week " Expect more work and volatility. Watch Murrey confluence with the cloud acting as support, failure."

 MW WTI W 9 13 19

US Natural Gas (Henry Hub)

Natural Gas continued to rally after the tenkan crossed through the Kijun and closed last week over the 50 dma and the daily cloud. Prices moved orderly through as Chikou rebalanced. The 1-2 set up paving the way.

 MW NG D 9 13 19

Natural Gas continued out of the weekly channel after it closed over the tenkan and eventually the Kijun which was min target and now support. We also tested the breakdown as marked. Resistance MM & 50wma, support the weekly channel and the tenkan 

MW NG W 9 13 19
 

Baltic Dry Index (BDI)

MW BDI W 9 13 19
 

Precious Metals

Gold

Gold continued lower after it completed it's minimum target from the breakout. The question is this a C or 3? Like Silver watch Fibs and Tenkan and Kijun. Watching for corrective 2 waves to tell us what this move is.

 MW Gold W 9 13 19

Silver

Silver rallied in 3 waves to retest the September 2017 breakdown. Third wave was impulse as is the reversal - meaning C or 3 and we came back to rebalance Chikou. We watch fibs 38% and lower fibs with tenkan and Kijun below.

 MW Silver W 9 13 19

Currency Markets

Australian Dollar - AUDUSD

The Aussie dollar impulse continued towards Kijun and daily cloud after held outside channel and oversold at -1/8 Murrey Math. Still much repair work to be done into the cloud to get a meaningful bounce in with flat Kijun pulling.

MW AUD W 9 13 19
 

New Zealand Dollar - NZDUSD

The Kiwi broke back through inside channel, regaining some strength since the RBNZ cut but failed to hold on to momentum. The AUDUSD giving a good indication of what is goin on via $AUDNZD, weekly channel in focus above tenkan holds it back. Chikou confluence at the downward channel rebalancing helped impulse.

MW NZD W 9 13 19
 

Canadian Dollar - USDCAD

The USDCAD bounce failed at 50% and fell back through top of cloud finding some support at the tenkan to bounce back to Kijun giving us a clear band. Loonie continues to find balance in the cloud. The tenkan is now seen as the pivot aspect. Support is cloud base 

 MW CAD W 9 13 19

Euro - EURUSD

Euro continued to recover after broke under the long weekly channel pennant after rejected by Kijun and Tenkan to find support at the outer band. Unless this is a spit the potential of the measured move becomes in around 1.0630 and lower. IF a spit than Tenkan is key. EUR remains a battle between EURJPY and EURCHF selling with EURGBP joining in this week.

 MW EUR W 9 13 19

EuroPound - EURGBP

EURGBP reflecting the madness of Brexit politics after reversed perfectly at the chikou and Murrey 6/8 (+2/8 recalc) to finish back under channel break  under Tenkan, Below 50 wma and Kijun & top of channel support. Ask Boris?

MW EURGBP W 9 13 19
 

Japanese Yen - USDJPY

The dollar yen recovery reflects trade war tweets under the tenkan. Still firmly in the channel breaking the tenkan cleanly to get legs higher with Kijun holding so far. Yen buying continued on the crosses, EURJPY and AUDJPY taking away the cloud twist that drew the dollar up.

MW JPY W 9 13 19 

Mexican Peso USDMXN

Mexican peso spat the upper channel hard to come all the way back through the Kijun and tenkan. The cloud will be a good focus for now. USDMXN is rebalancing chikou. Trade Wars and Argentina were not helping Mexico

 MW MXN W 9 13 19

Turkish Lire USDTRY

The USD Turkish Lire corrected much of the  emerging market downdraft after the coiling between daily Kijun and tenkan brought impulse. The correction took it back to the cloud base and Kijun where it is finding support.

 MW TRY D 9 13 19

Bitcoin

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 9 13 19

The Week Ahead

Key US Economic and Central Bank Events This Week

Sun Sept 15, 2019

  • 19:00 GBP Rightmove House Price Index (MoM)
  • 22:00 CNY Fixed Asset Investment (YoY) (Aug)
  • 22:00 CNY Industrial Production (YoY) (Aug)
  • 22:00 CNY Chinese Industrial Production YTD (YoY) (Aug)
  • 22:00 CNY Retail Sales (YoY) (Aug)
  • 22:00 CNY Chinese Unemployment Rate

Monday, Sept 16, 2019

  • All Day Holiday Japan - Respect for the Aged Day
  • 04:00 EUR Italian CPI (MoM)
  • 06:00 EUR Reserve Assets Total (Aug)
  • 08:30 USD NY Empire State Manufacturing Index (Sep)
  • 08:30 CAD Foreign Securities Purchases (Jul)
  • 08:30 CAD Foreign Securities Purchases by Canadians (Jul)
  • 11:30 USD 3-Month Bill Auction
  • 11:30 USD 6-Month Bill Auction
  • 17:00 NZD Westpac Consumer Sentiment (Q3)
  • 20:30 SGD Trade Balance
  • 21:30 AUD House Price Index (QoQ) (Q2)
  • 21:30 AUD RBA Meeting Minutes
  • 21:30 CNY House Prices (YoY) (Aug)
  • 23:00 NZD RBNZ Offshore Holdings (Aug)

Tuesday Sept 17, 2019

  • 01:45 CHF SECO Economic Forecasts
  • 04:30 HKD Unemployment Rate (Aug)
  • 05:00 EUR German ZEW Current Conditions (Sep)
  • 05:00 EUR German ZEW Economic Sentiment (Sep)
  • 05:00 EUR ZEW Economic Sentiment (Sep)
  • 08:30 CAD Manufacturing Sales (MoM) (Jul)
  • 08:55 USD Redbook (MoM)
  • 09:15 USD Capacity Utilization Rate (Aug)
  • 09:15 USD Industrial Production (MoM) (Aug)
  • 10:00 USD NAHB Housing Market Index (Sep)
  • 10:30 NZD GlobalDairyTrade Price Index
  • 13:10 EUR ECB's Coeure Speaks
  • 16:00 USD US Foreign Buying, T-bonds (Jul)
  • 16:00 USD Overall Net Capital Flow (Jul)
  • 16:00 USD TIC Net Long-Term Transactions (Jul)
  • 16:00 USD TIC Net Long-Term Transactions including Swaps (Jul)
  • 16:30 USD API Weekly Crude Oil Stock
  • 17:00 KRW PPI (MoM) (Aug)
  • 18:45 NZD Current Account (QoQ) (Q2)
  • 19:50 JPY Trade Balance (Aug)
  • 20:30 AUD MI Leading Index (MoM)

Wednesday, Sept 18, 2019

  • 02:00 GBP Car Registration (MoM) (Jul)
  • 02:00 EUR Italian Car Registration (MoM) (Jul)
  • 02:00 EUR German Car Registration (MoM) (Jul)
  • 02:00 EUR French Car Registration (MoM) (Jul)
  • 04:00 EUR Italian Industrial New Orders (MoM) (Jul)
  • 04:00 EUR Italian Industrial Sales (MoM) (Jul)
  • 04:30 GBP CPI (MoM) (Aug)
  • 04:30 GBP PPI Input (MoM) (Aug)
  • 04:30 GBP PPI Output (YoY) (Aug)
  • 05:00 EUR Italian Trade Balance (Jul)
  • 05:00 EUR CPI (MoM) (Aug)
  • Tentative EUR German 30-Year Bund Auction
  • 06:50 EUR ECB's De Guindos Speaks
  • 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
  • 08:30 USD Building Permits (MoM) (Aug)
  • 08:30 USD Housing Starts (MoM) (Aug)
  • 08:30 CAD CPI (MoM) (Aug)
  • 10:30 USD Crude Oil Inventories
  • 14:00 USD FOMC Economic Projections
  • 14:00 USD FOMC Statement
  • 14:00 USD Fed Interest Rate Decision
  • 14:30 USD FOMC Press Conference
  • 18:45 NZD GDP (QoQ) (Q2)
  • 21:30 AUD Employment Change (Aug)
  • 21:30 AUD Full Employment Change (Aug
  • 21:30 AUD RBA Bulletin
  • 21:30 AUD Unemployment Rate (Aug)
  • Tentative JPY BoJ Monetary Policy Statement
  • 23:00 JPY BoJ Interest Rate Decision

Thursday Sept 19, 2019

  • 02:00 CHF Trade Balance (Aug)
  • 02:00 EUR German WPI (MoM) (Aug)
  • 03:30 CHF SNB Monetary Policy Assessment
  • 04:00 EUR Current Account (Jul)
  • 04:30 GBP Retail Sales (MoM) (Aug)
  • 06:00 EUR ECB's Coeure Speaks
  • 07:00 GBP BoE Interest Rate Decision (Sep)
  • 07:00 GBP BoE MPC Meeting Minutes
  • 08:30 USD Continuing Jobless Claims
  • 08:30 USD Current Account (Q2)
  • 08:30 USD Initial Jobless Claims
  • 08:30 USD Jobless Claims 4-Week Avg.
  • 08:30 USD Philadelphia Fed Manufacturing Index (Sep)
  • 08:30 CAD ADP Nonfarm Employment Change
  • 09:00 ZAR Interest Rate Decision (Sep)
  • 10:00 USD Existing Home Sales (Aug)
  • 10:30 USD Natural Gas Storage 78B
  • 11:30 USD 4-Week Bill Auction
  • 11:30 USD 8-Week Bill Auction
  • 19:30 JPY CPI (MoM) (Aug)

Friday Sept 20, 2019

  • 02:00 EUR German PPI (MoM) (Aug)
  • 04:30 GBP Public Sector Net Borrowing (Aug)
  • 07:00 GBP BoE Quarterly Bulletin
  • 08:30 CAD Retail Sales (MoM) (Jul)
  • 10:00 EUR Consumer Confidence (Sep)
  • 11:20 USD FOMC Member Rosengren Speaks
  • 13:00 USD U.S. Baker Hughes Oil Rig Count
  • 15:30 USD CFTC Speculative net positions

 

Stock Buyback Watch

Via Emad Mnati @EmadMnati and MarketBeat

Stock BuyBAcks 1

Stock BuyBAcks 2

 

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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!

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