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

 US Politics

Speaker Nancy Pelosi by Nancy Ohanian

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

Impeachment, Trade Wars and Manufacturing

The Week That Was:

Another week of chaos, the dow was down over 800 points at one stage but recovered most by week's end. The jobs data was somewhat a goldilocks scenario with record low unemployment but lower earnings meaning the Fed cuts are more likely. The markets are back in a bad news is good groove. The impeachment has seen POTUS ramp up his call against the Bidens, and in doing so really split the nation,  many seeing the Bidens as classic poltical crooks and many seeing POTUS as overstepping for his own benefit.The reality is on the left you have a 79 year old man who just had a heart attack, a 76 year old former VP engulfed in corruption, a 70 year old woman has embraced more extreme left week than the Italian Communist Party. Perhaps one of the newer candidates will grab positive attention. On the right we have the 73 Trump, devisive one would say. The point being in a so called new era where is the new blood?

Of note is the wrath oil has dropped on blood specualtors, a 13 dollar or twenty percent down move, and quickly, reversing the biggest move since 1991 after Houthi rebels from Yemen launched successful drone attacks on the world's biggest petroleum processing facility in Saudi Arabia in less than 2 weeks  

Don't forget the U.S. overnight repurchase agreements (Repo) conducted by the New York Federal Reserve The U.S. central bank has conducted a series of cash-adding moves until October 10 (at least) as repo and other money market rates soared to levels not seen since the height of the global financial crisis in 2008. Memories of Lehman overhang.

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 Democrat impeachment,  Iran and Saudi moves, trade wars and repo rates - now we ask is bad news good news for the markets. The week will focus on manufacturing and the U.S. China trade talks slated for next week with deputies in the negotiations to meet Monday, with the top level officials beginning discussions on Thursday. Germany will report August factory order data on Monday morning. Last month’s numbers showed an unexpected slowdown as Trump’s trade war weighed on Germany’s foreign exports. Earlier this week economists from the Ifo Institute slashed their forecast for Germany’s 2019 GDP guess. China will also report its own data on Monday. Watch for the MBA mortgage report also it has had huge swings each week and is key to the economy and homebuilders. In the U.S. investors will be watching data that can help us gauge trade war fallout.

U.S. goods are more expensive due to a stronger dollar boosted by geopolitical woes and negative interest rates in Europe. The dollar index hit a 29-month high on Sept. 3. At the end of the week the US jobs market followed the unexpectedly soft August report. Eyes were on the growth of average hourly earnings. Investors are also transfixed by oil prices in reaction to the Saudi attack and recovery and military respsonses.

  • Monday Chinese PMI, German factory orders, UK Halifax House Price Index and consumer credit in the US
  • Tuesday German industrial Production and US Producer Price Index
  • WednesdayUS MBA Mortgage Applications, Crude Oil Inventories and Wholesales Inventories
  • Thursday German Balance of Trade and U.S. Consumer Price Index, Continuing Jobless Claims (US)
  • Friday German CPI, UK Balance of Trade, Gross Domestic Product, Industrial Production and RICS Housing Market Survey. US import and Export Price Indices, U. of Michigan Confidence and Baker Hughes Oil and Gas Rigs

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 The earnings reporting period begins with big banks including JPMorgan Chaseand others reporting on Oct. 15. last week included; Thor, McCormick, Stitch Fix,Lennar, Bed Bath & Beyond, PepsiCo, Constellation Brands, Costco,

We start off on Monday with:

Tuesday Earnings Include: Domino’s Pizza, Levi’s

Wednesday Earnings Include:

Thursday Earnings Include: Delta Air Lines, Hormel Foods

Friday Earnings Include: Wendy’s analyst meeting

-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

Earnings

Stock Markets

Biggest Stock Winners and Losers Last Week*

 MW TOP 5 stocks 10 4 19

Which Stocks Moved US ETF's Last Week

 MW TOP 5 ETF stocks 10 4 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.

 MW US Performance W 10 4 19

S&P 500

The $SPX traded down with momentum in 3 waves to reverse at Chikou and spat 2 trend lines back up over the Kijun and under daily tenkan, tested the recent breakup, closing at the relapsed speed line. Clearly bullish euphoria is alive within the hall marks of an ABC double zig zag.through 61.8% with alternatives as complete or continuing this week. 

Note developing pennant (pink) failed. 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 10 4 19

On the weekly SPX the spit of the trend line and back up through the Kijun and tenkan is powerful and in 3 waves so we must be aware of alternatives. The larger channel and +2/8 Murrey Math recalc confluence under 50 wma with the cloud and channel much lower.

 MW SPX W 10 4 19

Apple $AAPL

 MW AAPL W 10 4 19

Amazon $AMZN

 MW AMZN W 10 4 19

Fixed Interest

10 Year Treasury Note


 MW TNX W 10 4 19

Energy and Commodities

US Crude Oil (WTI)

WTI filled the gap without any resistance quickly completing a fractal spit per Adam's Theory, reflecting mindless speculation from the herd. From there CL_F is trying to find balance with the chikou well under the tenkan, Kijun and 50 dma. The impulse meant a C or (Y) complete - bullish case would be a developing X It reversed sharply under tanken to kijun as Chikou rebalanced.  

MW CL D 10 4 19
 

After WTI spat the weekly 61.8% momentum continued with power through the gap up. Reversed back under Tenkan, Kijun and 50wma (green) under the cloud after rejecting the break retest.  Clear 3 waves up and down to find support at previous spit zone.

 MW CL W 10 4 19

US Natural Gas (Henry Hub)

Natural Gas up corrected off first target at Murrey +3/8 testing the tenkan in iv of (C) or (1). then quickly into the cloud in 3 waves to bounce - either a iv or X i sequence (if fails lower)  Chikou rebalanced and Tenkan 50 dma resistance above held. 

MW NG D 10 4 19

Natural Gas spat the weekly 50wma and 3/8 confluence broke through the tenkan and Kijun to test previous channel to bounce at week's end.  Resistance MM & Kijun 50wma, support the weekly channel
 MW NG W 10 4 19

Baltic Dry Index (BDI)

MW BDI W 10 4 19
 

Precious Metals

Gold

Gold bounced after 3 waves into the Tenkan but quickly came off - watch for this being the B of the 4 - key is the recent lows at tenkan.  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 10 4 19

Silver

As expected - 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 and bounced off tenkan and 38% now support BUT we quickly gave it all back meaning more in this construction. Watch lower fibs with Kijun below.

 MW Silver W 10 4 19

Currency Markets

Australian Dollar - AUDUSD

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


 MW AUD W 10 4 19

New Zealand Dollar - NZDUSD

The Kiwi tested breakdown since the RBNZ cut but failed to hold on to momentum and reversed. The AUDUSD giving a good indication of what is going on via $AUDNZD, weekly channel in focus above tenkan holds it back. Chikou confluence at the downward channel rebalancing pulling. MW NZD W 10 4 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 10 4 19 

Euro - EURUSD

Euro failing 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 comes 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 10 4 19
 

EuroPound - EURGBP

EURGBP found support at cloud to complete min for wave 2 reflecting the madness of Brexit politics. Reversed perfectly at the chikou and Murrey 6/8 (+2/8 recalc) to get here under Tenkan, Below 50 wma and Kijun & top of cloud. Ask Boris?

MW EURGBP W 10 4 19
 Japanese Yen - USDJPY

The dollar yen recovery reflects trade war. Still firmly in the channel retested the tenkan break 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 10 4 19 

Mexican Peso USDMXN

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


 MW MXN W 10 4 19

Turkish Lire USDTRY

The USD Turkish Lire corrected much of the  emerging market downdraft and has been coiling between daily Kijun and tenkan in a pennant. The correction took it back to the cloud base and Kijun where it is finding support.

 MW TRY D 10 4 19

Bitcoin

Bitcoin found impulse lower after week's after failing to retake the 61.8% of the major move at pace back under the 50% and tenkan confluence to through the 38%. Use your MM rules as algos control the herd here, support is the cloud - we said be wary of sharp ABC, 1-2 moves.

 MW BTC W 10 4 19

The Week Ahead

Key US Economic and Central Bank Events This Week

Sun October 6, 2019

  • All Day Holiday China - National Day
  • 17:30 AUD AIG Construction Index (Sep) 
  • 18:50 JPY Foreign Reserves (USD) (Sep)
  • 21:00 AUD MI Inflation Gauge (MoM)

Monday, Oct 7, 2019

  • All Day Holiday Hong Kong - Chung Yeung
  • All Day Holiday China - National Day
  • 01:00 JPY Coincident Indicator (MoM) (Aug)
  • 01:00 JPY Leading Index (MoM) (Aug)
  • 02:00 EUR German Factory Orders (MoM) (Aug)
  • 02:45 EUR French Reserve Assets Total (Sep)
  • 03:30 GBP Halifax House Price Index (MoM) (Sep)
  • 04:30 EUR Sentix Investor Confidence (Oct)
  • 06:30 EUR Spanish Consumer Confidence
  • 10:00 USD CB Employment Trends Index (Sep)
  • 11:30 USD 3-Month Bill Auction
  • 11:30 USD 6-Month Bill Auction
  • 13:00 USD Fed Chair Powell Speaks
  • 15:00 USD Consumer Credit (Aug)
  • 19:00 KRW Current Account (Aug)
  • 19:01 GBP BRC Retail Sales Monitor (YoY) (Sep)
  • 19:30 JPY Household Spending (MoM) (Aug)
  • 19:30 JPY Overall wage income of employees (Aug)
  • 19:50 JPY Current Account n.s.a. (Aug)
  • 20:30 AUD ANZ Job Advertisements (MoM)
  • 20:30 AUD NAB Business Confidence (Sep)
  • 20:30 AUD NAB Business Survey (Sep)
  • 21:45 CNY Caixin Services PMI (Sep)
  • Tentative CNY Trade Balance (USD)

Tuesday Oct 8,2019

  • All Day Holiday India - Dasara
  • 01:00 JPY Economy Watchers Current Index (Sep)
  • 01:45 CHF Unemployment Rate (Sep)
  • 02:00 EUR German Industrial Production (MoM) (Aug)
  • 02:45 EUR French Current Account (Aug)
  • 02:45 EUR French Trade Balance (Aug)
  • 03:00 EUR Spanish Industrial Production (YoY) (Aug)
  • 04:00 EUR Italian Retail Sales (MoM) (Aug)
  • 04:00 CNY FX Reserves (USD)
  • 04:30 GBP Labour Productivity (Q2)
  • 04:30 HKD Foreign Reserves (USD) (Sep)
  • 06:00 USD NFIB Small Business Optimism (Sep)
  • 08:15 CAD Housing Starts (Sep)
  • 08:30 USD PPI (MoM) (Sep)
  • 08:30 CAD Building Permits (MoM) (Aug)
  • 08:55 USD Redbook (MoM)
  • Tentative USD IBD/TIPP Economic Optimism
  • 11:30 USD 52-Week Bill Auction
  • 13:00 USD 3-Year Note Auction
  • 13:50 USD Fed Chair Powell Speaks
  • 16:30 USD API Weekly Crude Oil Stock
  • 19:30 AUD Westpac Consumer Sentiment (Oct)

Wednesday, Oct 9, 2019

  • All Day Holiday South Korea - Proclamation Day
  • 02:00 JPY Machine Tool Orders (YoY)
  • 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
  • 10:00 USD JOLTs Job Openings (Aug)
  • 10:00 USD Wholesale Inventories (MoM)
  • 10:00 USD Wholesale Trade Sales (MoM) (Aug)
  • 10:30 USD Crude Oil Inventories
  • 13:00 USD 10-Year Note Auction
  • 14:00 USD FOMC Meeting Minutes
  • 17:45 NZD FPI (MoM) (Sep)
  • 19:00 JPY Reuters Tankan Index (Oct)
  • 19:01 GBP RICS House Price Balance (Sep)
  • 19:30 AUD Westpac Consumer Sentiment (Oct)
  • 19:50 JPY Bank Lending (YoY) (Sep)
  • 19:50 JPY Core Machinery Orders (MoM) (Aug)
  • 19:50 JPY PPI (MoM) (Sep)
  • 20:00 AUD MI Inflation Expectations
  • 20:30 AUD Home Loans (MoM) (Aug)
  • 20:30 AUD Invest Housing Finance (MoM)
  • 23:35 JPY 30-Year JGB Auction

Thursday Oct 10, 2019

  • 02:00 EUR Gemran Current Account Balance n.s.a (Aug)
  • 02:00 EUR German Trade Balance (Aug)
  • 02:45 EUR French Industrial Production (MoM) (Aug)
  • 04:00 EUR Italian Industrial Production (MoM) (Aug)
  • 04:30 GBP Construction Output (MoM) (Aug)
  • 04:30 GBP GDP (QoQ) 04:30 GBP Index of Services
  • 04:30 GBP Industrial Production (MoM) (Aug)
  • 04:30 GBP Manufacturing Production (MoM) (Aug)
  • 04:30 GBP Trade Balance (Aug)
  • 05:30 ZAR Gold Production (YoY) (Aug)
  • 05:30 ZAR Mining Production (Aug) 0
  • 6:00 EUR Eurogroup Meetings
  • 07:00 USD OPEC Monthly Report
  • 08:30 USD Continuing Jobless Claims
  • 08:30 USD CPI (MoM) (Sep)
  • 08:30 USD Initial Jobless Claims
  • 08:30 USD Jobless Claims 4-Week Avg.
  • 08:30 USD Real Earnings (MoM) (Sep)
  • 08:30 CAD New Housing Price Index (MoM) (Aug)
  • Tentative GBP NIESR GDP Estimate
  • 10:30 USD Natural Gas Storage
  • 11:00 USD Cleveland CPI (MoM) (Sep)
  • 11:30 USD 4-Week Bill Auction
  • 11:30 USD 8-Week Bill Auction
  • 12:00 USD WASDE Report
  • 12:15 USD FOMC Member Kashkari Speaks
  • 13:00 USD 30-Year Bond Auction
  • 17:30 USD FOMC Member Mester Speaks
  • 17:30 NZD Business NZ PMI (Sep)
  • 17:45 NZD Electronic Card Retail Sales (MoM) (Sep)
  • 20:00 SGD GDP (QoQ) (Q3)
  • Tentative AUD RBA Financial Stability Review
  • Tentative KRW BOK Financial Stability Board Meeting Minutes

Friday Oct 11, 2019

  • 02:45 EUR French CPI (MoM 03:00 EUR Spanish CPI (MoM)
  • Tentative USD OPEC Meeting
  • 06:30 EUR ECB's De Guindos Speaks
  • 08:00 USD FOMC Member Kashkari Speaks
  • 08:30 USD Export Price Index (MoM) (Sep)
  • 08:30 USD Import Price Index (MoM) (Sep)
  • 08:30 CAD Employment Change (Sep)
  • 08:30 CAD Full Employment Change (Sep)
  • 08:30 CAD Part Time Employment Change (Sep)
  • 08:30 CAD Unemployment Rate (Sep)
  • 10:00 USD Michigan Consumer Sentiment (Oct)
  • 13:00 USD U.S. Baker Hughes Oil Rig Count
  • 13:15 USD FOMC Member Rosengren Speaks
  • 15:00 USD FOMC Member Kaplan Speaks1
  • 15:30 USD CFTC Speculative net positions
  • 20:00 SGD GDP (QoQ) (Q2)
  • 20:00 SGD GDP (YoY) (Q2)

 

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