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FEAR NOT Brave Investors
 

Santa Drinking
 

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

Stock Market Mania, Christmas and Reflection

The Week That Was:

Deja Vu, stock ramps, distraction, impeachment and aminosity across the aisle. Over in the UK Boris Johnson moved quickly to ensure Brexit by Dec 31, 2020, the Bank of England had it's first meeting since the election also. With regard to the trade deal It is all dependant on so many factors, clearly the dealing isn't complete.We leave the different interpretations between the US and China here for your own perusal. Ina  fully fledged stock mania, nothing matters until it does.

Again we hit extended  all time highs in the S&P 500 in a larger economically depressed global world. Is the market ahead of it's self? Behind it all is world wide low interest rates and QE pump priming by the world's major central banks,  the Federal Reserve, Swiss National Bank and ECB all preached more of the same.

The put call ratio, Vix and talking heads underscore there is no fear out there. We remain at new all time highs for the Dow Jones Industrial Average, S&P 500 and Nasdaq.  What happens if music for pass the parcel stops playing? What if  on China and the U.S. the market calls their bluff?. There is a reason why so many experienced fund managers are closing up shop.

On friday oil reversed off the buy everything train as the weight of a bearish EIA, US rigs increasing and weak global industrial demand. Meanwhile the punters in the equity market choose to ignore these signals. EIA reports show near record production and crude builds of 11 otf 14 weeks. 

The market has shrugged off Brexit, impeachment and geopolitical powder keg risk and Fed injecting 60 Billion into the system to maintain liquidity, in its not QE4 program.The consumer has been keeping the economy robust.

Poltically we have the growing antagonistic and partisan split of the impeachment of the POTUS, in the UK and Europe we have the daily Brexit news cycle. Enjoy those Christmas conversations!

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. Read the recent reports with open eyes.

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"

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. In saying that the old saying, the trend is your friend rings true.

The Week Ahead

This week we could see more volatility ahead of Christmas and the New Year in very illiquid markets with stocks at all time highs and President Trump prone to tweets and rash statements. We have energy reports moved to the end of the week with Durable Goods the stand out for US data.

The U.S. politically remains combustible, led by Democrat impeachment, Turkey, Iran and Saudi moves, trade wars and repo rates. The market continues to focus on "phase one" of the  U.S. China trade talks.

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. Investors are also transfixed by oil prices in reaction to the Saudi attack and recovery and military respsonses.

  • Monday 
    US Durable Goods
  • Tuesday
     API Crude Oil Inventories
  • Wednesday Christmas Day
  • Thursday US MBA Mortgage Applications, US Initial Jobless Claims,
  • Friday EIA US Crude Oil Inventories, EIA Natural Gas Storage, Baker Hughes Oil Rig Count, CFTC Speculative net positions


It is now over 18 months since the trade deal between the United States with China was around the corner. The White house said it needs more time, then turned around and slapped more tariffs on and said hey we are still talking, then off come soem tariifs  Now we have phases, one and two. 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. 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 continued with FedEx (NYSE:FDX), Navistar (NYSE:NAV) and Steelcase (NYSE:SCS), Micron (NASDAQ:MU) and General Mills (NYSE:GIS), Nike (NYSE:NKE), Carnival (NYSE:CCL), ConAgra (NYSE:CAG), Rite Aid (NYSE:RAD) and Darden Restaurants (NYSE:DRI) Winnebago (NYSE:WGO), BlackBerry (NYSE:BBY) and CarMax (NYSE:KMX)

We start off on Monday with: Neogen Corp. (NASDAQ NEOG)

Tuesday Earnings Include: no stocks reporting earnings

Wednesday Earnings Include: no stocks reporting earnings

Thursday Earnings Include: no stocks reporting earnings

Friday Earnings Include: no stocks reporting earnings

-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 SPX 12 20 19

 Which Stocks Moved US ETF's Last Week

MW Top 5 SPX ETF 12 20 19
 

US Stock Indices Performance

 MW US Performance 12 20 19

S&P 500

The SPX continues to play out evolved classic Wave 5 impulse after ATH corrected back though the daily speed line, Tenkan. MM 8/8 and Kijun fueled this year end manic surge. Best alternatives  (v) of wave V or wave iii higher, Speed and channel lines in tune with algo calibration curve. Note Chikou rebalance in order.

MW SPX D 12 20 19
 

More impulse after Weekly SPX  fell hard to test the channel break, which ignited to new all time highs, below we have Kijun and tenkan. Below channel, watch if a spit or clear break support is 50 wma as chikou rebalances

 MW SPX W 12 20 19

Apple $AAPL

(Another ATH Leading underlying strength of US Indices)

MW AAPL W 12 20 19
 

Amazon $AMZN

MW AMZN W 12 20 19
 

CBOE VIX INDEX

Data via Ole S Hansen @Ole_S_Hansen

VIX caution: Not only did the net-short hit a record but so did the percentage of total open interest which reached 50%. History tells us that positions this elevated could leave the short side very vulnerable to a sudden change in direction $SPX $SVXY $XIV

Image

Speculators increased their VIX futures net-short by 17k lots to a RECORD 188k lots in the wk to Oct. 29. During the past month the #SPX rally has helped widen the contango thereby fueling short-selling strategies though futures and inverse ETFs $SVXY and $XIV.

 Image

Fixed Interest

10 Year Treasury Note

MW TNX W 12 20 19
 

Energy and Commodities

US Crude Oil (WTI)

WTI formed a right shoulder? A fall through tenkan would suggest yes. The reversal comes after after held onto last week's gains through tenkan, Kijun and 50 dma zone to close over the cloud. Rebalancing Chikou with support the Tenkan Kijun below.  Watch the channel. The impulse meant a C or (Y) complete - bullish case would be a developing X


MW CL D 12 20 19
 

WTI has shaped as a Head and shoulder from the May left shoulder after the sharp impulse higher through 50 WMA and the cloud top key supports remain Kijun and 50wma confluence (green), doing work at the old 38%.

 MW CL W 12 20 19

US Natural Gas (Henry Hub)

Natural Gas is shaping as a 1-2 off the MM 3/8 and back through the Tenkan. Recall it was rejected at the weekly tenkan last bounce, downside held October break up . Resistance from cloud down from impulse. On bounce rebalancing with chikou. Gap above.  Correcting the Murrey Math 1/8 and Wave iii or Alt C high. Support also near lows and channel from underneath 

MW NG D 12 20 19
 

Natty trying to get back over old trendline break from impulse down after Natural Gas rally rejected at the 61.8% and the March highs with the tenkan and Kijun now resistance around retest of 2.50-52 band after uptrend support at 2.34. Watch for Kijun/Tenkan cross after retesting the weekly channel break.

 MW NG W 12 20 19

 

Baltic Dry Index (BDI)

MW BDI W 12 20 19
 

Precious Metals

Gold

Once again Gold topside was rejected by Tenkan in corrective mode of wave structure after it bounced in 3 waves to 1556 to Murrey Math +2/8. Support is Kijun while market decides.  From there a C or 3?  Watch Fibs and chikou. Watching for corrective 2 waves to tell us what this move is.

MW Gold W 12 20 19

Silver

Silver sharp reversal higher aoff 50 wma, different pattern to gold after a  blow off 3 or C rallied off the 50% after it rallied in 3 waves to retest the September 2017 breakdown  We see Tenkan and Kijun trying to cross, be ready. There is also a chance this is an X. Held back by Kijun with Tenkan above.  We watch recent lows if this a 4 down or C complete

 MW Silver W 12 20 19

Currency Markets

Australian Dollar - AUDUSD

The Aussie dollar is battling the 50 wdma back over the Kijun and tenkan which is now support. Work being done after the move to MM +1/8 first target of the bull flag break pulling and then releasing.

MW AUD W 12 20 19

 New Zealand Dollar - NZDUSD

The Kiwi bounce against AUD and USD continued as reflected in $AUDNZD. We are watching as Tenkan and Kijun trying to cross right at resistance above breakdown (muave) to power through 50 wma just shy of cloud.. The Chikou under series of tops key at week's end.

MW NZD W 12 20 19
 

Canadian Dollar - USDCAD

The USDCAD was rejected hard at the 50wma and cloud, closing the week under the tenkan and Kijun. Support remains channel and break up level. Resistance top of cloud and 50 wma. The tenkan remains the pivot aspect.

MW CAD W 12 20 19
Euro - EURUSD

Euro again flirting with tenkan after another firm rejection of Kijun governed by $EURGBP and #Bund volatility. Support pennant break. Unless this is a spit the potential of the measured move comes in around 1.0630 and lower. EUR remains a battle between EURJPY and EURCHF.

MW EUR W 12 20 19

 EuroPound - EURGBP

EURGBP reflects the British Pound surge and collapse after the election -  be aware of any fractal spit.  The weekly cloud is well above and resistance is the May breakup reflecting Brexit politics. Resistance at kijun after Tenkan with support at Nov 2017 lows

MW EURGBP W 12 20 19
 Japanese Yen - USDJPY

Grondhog day with USDJPY over the weekly Kijun and closed at 50 wma and the cloud twist. Still needs to get over cloud to get legs and pull away. It is drawn by 38% and Murrey 6/8.  Kijun need to turn up for impulse. Yen buying returned on crosses, EURJPY and AUDJPY taking away the cloud twist that drew the dollar up.

MW JPY W 12 20 19

 Mexican Peso USDMXN

Mexican peso gained again after it held the cloud and the Kijun trading well with the Gann fans. It then accelerated off the tenkan and back through the channel after the USMC trade deal. Watch if a fractal spit on recent highs.
 MW MXN W 12 20 19

Turkish Lire USDTRY

USDTRY impulse higher after found support at daily Kijun and Tenkan  to get back above cloud  Impulse is needed to pull away from here. Support is the previous break up and tenkan and Kijun. Keep an eye on geopolitical risk factors.

MW TRY D 12 20 19
 

Bitcoin

Nothi ng new for Bitcoin as it continues to falter after the 61.8% spit. Well under the tenkan and kijun. Needs to test downtrend for higher correction. 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 12 20 19
 

The Week Ahead

Key US Economic and Central Bank Events This Week

Sun December 22, 2019

  • 19:30 AUD Housing Credit (Nov)
  • 19:30 AUD Private Sector Credit (MoM) (Nov)
  • 23:30 JPY All Industries Activity Index (MoM)

Monday, December 23, 2019

  • 00:00 JPY Leading Index
  • 00:00 SGD CPI (YoY) (Nov)
  • 03:00 EUR Spanish PPI (YoY)
  • Tentative EUR German Buba Monthly Report
  • 07:30 USD Durable Goods Orders (MoM) (Nov)
  • 08:30 USD Chicago Fed National Activity (Nov)
  • 08:30 CAD GDP (MoM) (Oct)
  • 10:00 USD New Home Sales (MoM) (Nov)
  • 11:30 USD 3-Month Bill Auction
  • 11:30 USD 6-Month Bill Auction
  • 13:00 USD 2-Year Note Auction
  • 18:50 JPY Monetary Policy Meeting Minutes

Tuesday December 24, 2019

  • All Day Holiday Brazil Germany Italy Switzerland Christmas Eve
  • Holiday - Christmas Eve Hong Kong- Early close at 12:00
  • Holiday United Kingdom - Christmas Eve - Early close at 12:30
  • Holiday Singapore - Christmas Day - Early close at 12:35
  • Holiday United States - Christmas - Early close at 13:00
  • Holiday Spain - Christmas - Early close at 14:00
  • Holiday France - Christmas Eve - Early close at 14:05
  • Holiday Australia - Christmas Eve - Early close at 14:10
  • 00:00 JPY BoJ Core CPI (YoY)
  • 08:30 USD Durable Goods Orders (MoM) (Nov)
  • 08:55 USD Redbook (MoM)
  • 10:00 USD Richmond Manufacturing Index (Dec)
  • 10:00 USD Richmond Services Index (Dec)
  • 16:30 USD API Weekly Crude Oil Stock
  • 18:50 JPY Corporate Services Price Index (CSPI) (YoY)

Wednesday, December 25, 2019

  • All Day Holiday Australia Brazil Canada France Germany Hong Kong India  Italy Singapore South Africa South Korea Spain Switzerland United Kingdom United States - ChristmasDay
  • 18:50 JPY Foreign Bonds Buying
  • 18:50 JPY Foreign Investments in Japanese Stocks
  • 19:00 JPY BoJ Governor Kuroda Speaks
  • Tentative KRW BOK Financial Stability Board Meeting

Thursday, December 26 2019

  • All Day Holiday Australia Canada France Germany South Africa Spain United Kingdom Boxing Day
  • All Day Holiday Hong Kong - The first weekday after Christmas Day
  • All Day Holiday Switzerland - St. Stephen's Day
  • All Day Holiday Italy - Christmas
  • 00:00 JPY Construction Orders (YoY)
  • 00:00 JPY Housing Starts (YoY) (Nov)
  • 00:00 SGD Industrial Production (MoM) (Nov)
  • 06:00 EUR France Jobseekers Total
  • 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 Continuing Jobless Claims
  • 08:30 USD Initial Jobless Claims
  • 08:30 USD Jobless Claims 4-Week Avg.
  • 11:30 USD 4-Week Bill Auction
  • 11:30 USD 8-Week Bill Auction
  • 13:00 USD 7-Year Note Auction
  • 16:00 KRW Consumer Confidence (Dec)
  • 18:30 JPY Jobs/applications ratio (Nov)
  • 18:30 JPY Tokyo CPI (YoY) (Dec)
  • 18:30 JPY Unemployment Rate (Nov)
  • 18:50 JPY BoJ Summary of Opinions
  • 18:50 JPY Industrial Production (MoM) (Nov)
  • 18:50 JPY Retail Sales (YoY) (Nov)
  • 20:30 CNY Chinese Industrial profit (YoY) (Nov)

Friday Dec 27, 2019

  • 00:30 AUD Commodity Prices (YoY)
  • 03:00 EUR Spanish Retail Sales (YoY) (Nov)
  • 04:00 CHF ZEW Expectations (Dec)
  • 04:00 EUR ECB Economic Bulletin
  • 04:30 GBP Gross Mortgage Approvals
  • 10:30 USD Natural Gas Storage
  • 11:00 USD Crude Oil & Gasoline Inventories
  • 13:00 USD U.S. Baker Hughes Oil and Gas Rig Count
  • 14:30 USD CFTC speculative net positions

Saturday, Dec 28, 2019

 

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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