Market Weekly: January 19 – 26 2020

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FEAR NOT Brave Investors

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

Mania, Impeachment and Earnings

The Week That Was:

Its’ a mania…as the song goes ….  The three major U.S. indices all closed at record highs in the best week for stocks since August. Earnings began with mainly solid results from the large money center banks, JPM, BAC, C, GS, MS with only WFC dragging. This week the likes of IBM, American Express, Johnson & Johnson report. Whether the Phase One China trade relationship is merely hot air or not it is now on the back burner. Next up is U.S. trade relations with Europe. Back in the Middle East expect more noise out of Iran to sate their masses, this war is not over, just back to the proxies and propaganda phase. Rationality left the building a long time ago.

Wall Street has embraced the mantra ‘Greed is Good” more than any before.

Meanwhile House Speaker Pelosi sent out impeachement articles to the senate and we begin a devisive trial next week. Sceptics suggest this is more with President Trump stunning success, for now at least, from having ordered the drone strike against Soleimani. He was considered the architect of Iran’s strategic operations in the proxy war against the United States. While they argue his future at home President Donald Trump travels to Davos, Switzerland for the World Economic Forum, where he speaks Tuesday as economic news contrinues to dissappoint globally. Sadly over in Australia the country is being ravaged by bush fires, the largest and most deadly ever seen.

A swallow doesn’t make a summer and on that stay alert to the political and geopolitical shifts with the world in flux. Government policies related to the environment, trade and tech sit high on the watch list.  Political and economic agendas that Influence policy-making is top of the list. For the US it is not just external threats, including increased political tensions between countries but also internal threats highlighted by the partisan impeachment devide. 

Politics influence all, directly or indirectly.  The trade war and trade relationships have the potential to impact growth strategies with unexpected consequences with this markets also be vulnerable. There is little doubt political uncertainty has become more widespread. With regard to the trade deal It is all dependant on so many factors, clearly the dealing isn’t complete. In a  fully fledged stock mania, nothing matters until it does. That is the feral nature of greed.

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.

This week’s V reversal , the put call ratio, Vix and talking heads underscore there is no fear out there. We remain just off 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.

The market has shrugged off Brexit, impeachment and geopolitical powder keg risk and Fed injecting 80 Billion a day  into the system to maintain liquidity, in its not QE4 repo 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. Happy New Year!

Britain’s parliament reconvened on Jan 7 and debated the divorce deal Prime Minister Boris Johnson has agreed with Brussels. The bill went to parliament’s upper house on Thursday and was ratified to allow Johnson to fulfil his pledge to “get Brexit done” by Jan. 31..

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 BUT economics not being the market. The market has become nothing more than a casino. 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.

Akio Morita mistakes

The Week Ahead

This week we could see more volatility with the POTUS impeachment entering the senate phase. Stocks are just off all time highs and geopolitical risk on high alert with President Trump under pressure at home and abroad. There are a few American economic reports, including existing home sales Wednesday; leading indicators Thursday, and the Markit PMI data for manufacturing and services on Friday. The biggest risk alert is valuation, the stock market’s record highs and price earnings ratio of more than 18.5.

We start off with

The U.S. politically remains combustible, led by Democrat impeachment, Turkey, Iran and Saudi moves, trade wars and repo rates.

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 
    Martin Luther King holiday Stock market closed
  • Tuesday
    US API Crude Oil Inventories
  • Wednesday:
    US MBA Mortgage Applications, FHFA home prices Existing home sales,. EIA Crude Oil Inventories
  • Thursday US Initial Jobless Claims, EIA Natural Gas Storage, Leading economic indicators
  • Friday US Manufacturing PMI , Services PMI, Baker Hughes Oil Rig Count, CFTC Speculative net positions

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 trade wars.

Earnings Earnings from the large banks, J.P. Morgan Chase, Wells Fargo, Citigroup, Bank of America, Goldman Sachs and Morgan Stanley kicked off the week. The energy sector earnings kicked off with Schlumberger. Last week also included Aphria (APHA), Delta Air Lines (DAL),UnitedHealth Group (UNH), PPG Industries (PPG), CSX Corporation (CSX)

We start off on Monday with: Martin Luther King holiday Stock market closed,

Tuesday Earnings Include: Netflix, Haliburton, IBM, Capital One, TD Ameritrade, United Airlines

Wednesday Earnings Include: Johnson and Johnson, Abbott Labs, Citrix, Raymond James, SLM, Bancorp South, Baker Hughes, Northern Trust, Texas Instruments, Fifth Third, Comerica

Thursday Earnings Include: Procter and Gamble, Intel, Union Pacific, American Airlines, Comcast, Keycorp, Kimberly Clark, Huntington Banchshares, Southwest, Travelers, ETrade, JetBlue, Discover Financial, Intuitive Surgical, Skyworks

Friday Earnings Include: American Express, Raytheon, Air Products, Synchrony Financial, NextEra Energy

-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 SPX Stocks W 1 17 2020

 Which Stocks Moved US ETF’s Last Week

 US Top 5 ETF Stocks W 1 17 2020

US Stock Indices Performance

US Major Indices W 1 17 2020

S&P 500

The SPX wave 5 extension impulse continued after the post Iran hit thrust to new highs in a manic wave 5 or 3 of some degree. All the hallmarks of a mania, +5/8 Daily MM over the chikou in 5 violent waves. The question is this a wave 5 and of what degree?  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.
SPX D 1 17 2020 

After impulse off the weekly tenkan the weekly SPX closed over the top channel tor new all time highs well ahead of the Chikou, Below we have Kijun and tenkan. Below channel, watch if a spit or clear break support is 50 wma as chikou rebalances

SPX W 1 17 2020

Semiconductors ETF – SMH

SMH W 1 17 2020

Apple $AAPL

(Another ATH Leading underlying strength of US Indices)

AAPL W 1 17 2020

Amazon $AMZN

AMZN W 1 17 2020


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


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.


Fixed Interest

10 Year Treasury Note

TNX W 1 17 2020

Energy and Commodities

US Crude Oil (WTI)

WTI still working through the fall out from the rip and fail on Iran news. Math and crowd behavior tell the story right to the +2/8 and collapsed back to the break up. From here question is was the higehr C complete? Resistane tenkan, Kijun and 50 dma zone over the cloud. Rebalancing Chikou and MM 8/8 gave us overbought caution but we had the manic thrust.  Watch the channel. The impulse meant a C or (Y) complete.

WTI D 1 17 2020

WTI rally shape is correctional after the sharp impulse higher and reversal through 50 WMA and the cloud top key supports remain Kijun and 50wma confluence (green) all failed aftet the violent spike up. Resistance channel and fib conflageration with MM 4.8
 WTI W 1 17 2020

 US Natural Gas (Henry Hub)

Natural Gas gave it all up after another failed tenkan nside the babson lines and median channel  seeing impulse lower. Recall it was rejected at the weekly tenkan last bounce, downside acce;erated throuh October break up . Resistance from cloud down from impulse. Correcting the Murrey Math 1/8 and Wave iii or Alt C high. Support on downtrend line under 1.90 – not pretty

NG D 1 17 2020

Natty nothing new. just more failure  – failed to get 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. then we have since just ratched down  We got the Kijun/Tenkan cross after retesting the weekly channel break and the kiss of death.

NG W 1 17 2020

Baltic Dry Index (BDI)

BDI W 1 17 2020


Precious Metals


Gold is back testing the previous wave 3 after it finally cracked the Tenkan after correcting in 3 waves from 1556 to Murrey Math +3/8. 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.

Gold W 1 17 2020


Silver diverged further from gold not breaking the previous iii or C as Gold did.  Since we have continued a reversal harder , a  much more violent impulse than gold after correcting the 3 or C. Key is the 50% after it rallied in 3 waves to retest the September 2017 breakdown  here is also a chance this is an X. We watch recent lows if this a 4 down or C complete

 Silver W 1 17 2020


Currency Markets

Australian Dollar – AUDUSD

The Aussie dollar is floundering around the tenkan after reversed hard after breaching the cloud and tested the 50 wma and around Kijun now support. Fell after the move to MM +1/8 first target.

AUD W 1 17 2020

 New Zealand Dollar – NZDUSD

The Kiwi spent the week retesting the breakup after the bounce faltered much like the AUD and came back through the cloud.  We are watching as Tenkan and Kijun trying to cross back through which could bring the ‘kiss of death’. The Chikou needs to rebalance.
 NZD D 1 17 2020

Canadian Dollar – USDCAD

The USDCAD back retesting old channel after was rejected hard at the 50wma and cloud, closing the week under old channel, tenkan and Kijun Resistance top of cloud and 50 wma. The tenkan remains the pivot aspect.

CAD W 1 17 2020

Euro tested top of channel after held tenkan with Kijun closing through it – watch for impulse down if starts to break wedge,  Again 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.

EUR W 1 17 2020

 EuroPound – EURGBP

EURGBP back testing tenkan after bounce, weekly cloud is well above and resistance is the May breakup reflecting Brexit politics. Resistance at kijun withr Tenkan support and Nov 2017 lows

EURGBP W 1 17 2020
 Japanese Yen – USDJPY

Classic failure at USDJPY after weeks over the weekly Kijun and closed at 50 wma and the cloud twist but couldnt get legs up. It was drawn by 38% and Murrey 6/8.  It broke out of Wedge as Kijun stayed flat. Yen buying on crosses, EURJPY and AUDJPY taking away the cloud twist that drew the dollar up.

JPY W 1 17 2020

 Mexican Peso USDMXN

Found support at last Gann octave as Mexican peso gave up some of recent gains after it held the cloud. Flat Kijun and Tenkan pulling after the USMC trade deal. Watch if a fractal spit on recent highs.

MXN W 1 17 2020Turkish Lire USDTRY

USDTRY impulse higher continued 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.

TRY W 1 17 2020


Nothing new for Bitcoin, more of the same as it continues to falter after 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.

 BTC W 1 17 2020

The Week Ahead

Key US Economic and Central Bank Events This Week

Sun January 19, 2020

  • 19:01 GBP Rightmove House Price Index (MoM)
  • 20:30 CNY PBoC Loan Prime Rate
  • 23:30 JPY Capacity Utilization (MoM) (Nov)
  • 23:30 JPY Industrial Production (MoM) (Nov)

Monday, January 20, 2020

  • All Day Holiday United States – Martin Luther King, Jr. Day
  • 02:00 EUR German PPI (MoM) (Dec)
  • 02:00 CNY FDI
  • 03:30 HKD Unemployment Rate (Dec)
  • 08:00 CHF World Economic Forum Annual Meetings
  • 13:30 EUR ECB President Lagarde Speaks
  • 16:00 KRW PPI (MoM) (Dec)
  • 21:00 NZD RBNZ Offshore Holdings (Dec)
  • 22:00 JPY BoJ Outlook Report (YoY)
  • 22:00 JPY BoJ Interest Rate Decision

Tuesday January 21, 2020

  • 02:00 CNY FDI
  • 02:30 CHF World Economic Forum Annual Meetings
  • 03:30 HKD CPI (YoY) (Dec) 04:00 EUR Spanish Trade Balance
  • 04:30 GBP Employment Change 3M/3M (MoM) (Nov)
  • 04:30 GBP Unemployment Rate (Nov)
  • 05:00 EUR German ZEW Current Conditions (Jan)
  • 05:00 EUR German ZEW Economic Sentiment (Jan)
  • 05:00 EUR ZEW Economic Sentiment (Jan)
  • 05:30 USD U.S. President Trump Speaks
  • 08:30 CAD Manufacturing Sales (MoM) (Nov)
  • 10:20 NZD GlobalDairyTrade Price Index
  • 11:30 USD 3-Month Bill Auction
  • 11:30 USD 6-Month Bill Auction
  • 18:00 KRW GDP (QoQ) (Q4)
  • 18:30 AUD Westpac Consumer Sentiment (Jan)

Wednesday, January 22, 2020

  • 02:45 EUR French Business Survey (Jan)
  • 03:00 CHF World Economic Forum Annual Meetings
  • 04:00 EUR Italian Industrial New Orders (MoM) (Nov)
  • 04:00 EUR Italian Industrial Sales (MoM) (Nov)
  • 04:30 GBP Public Sector Net Borrowing (Dec)
  • 04:30 GBP Public Sector Net Cash Requirement (Dec)
  • 06:00 GBP CBI Industrial Trends Orders (Jan)
  • 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 Chicago Fed National Activity (Dec)
  • 08:30 CAD CPI (MoM) (Dec)
  • 08:30 CAD New Housing Price Index (MoM) (Dec)
  • 08:30 CAD Wholesale Sales (MoM) (Nov)
  • 08:55 USD Redbook (MoM)
  • 09:00 USD House Price Index (MoM) (Nov)
  • 10:00 USD Existing Home Sales (MoM) (Dec)
  • 10:00 CAD BoC Monetary Policy Report
  • 10:00 CAD BoC Rate Statement
  • 10:00 CAD BoC Interest Rate Decision
  • 11:00 CAD BOC Press Conference
  • 16:30 USD API Weekly Crude Oil Stock
  • 16:45 NZD External Migration & Visitors (Nov)
  • 16:45 NZD Permanent/Long-Term Migration (Nov)
  • 18:50 JPY Trade Balance (Dec)
  • 19:00 AUD MI Inflation Expectations
  • 19:30 AUD Employment Change (Dec)
  • 19:30 AUD Full Employment Change (Dec)
  • 19:30 AUD Participation Rate (Dec)
  • 19:30 AUD Unemployment Rate (Dec)
  • 23:30 JPY All Industries Activity Index (MoM)

Thursday, January 23 2020

  • 00:00 JPY Leading Index
  • 00:00 SGD CPI (YoY) (Dec)
  • 03:00 CHF World Economic Forum Annual Meetings
  • 07:45 EUR Deposit Facility Rate (Jan)
  • 07:45 EUR ECB Marginal Lending Facility
  • 07:45 EUR ECB Monetary Policy Statement
  • 07:45 EUR ECB Interest Rate Decision (Jan)
  • 08:30 USD Continuing Jobless Claims
  • 08:30 USD Initial Jobless Claims
  • 08:30 USD Jobless Claims 4-Week Avg.
  • 08:30 EUR ECB Press Conference
  • 10:00 USD US Leading Index (MoM) (Dec)
  • 10:00 EUR Consumer Confidence (Jan)
  • 10:30 USD Natural Gas Storage
  • 11:00 USD Crude Oil Inventories
  • 11:00 USD Gasoline Inventories
  • 11:00 USD KC Fed Composite Index (Jan)
  • 11:00 USD KC Fed Manufacturing Index (Jan)
  • 11:30 USD 4-Week Bill Auction
  • 11:30 USD 8-Week Bill Auction
  • 13:00 USD 10-Year TIPS Auction
  • 16:45 NZD CPI (QoQ) (Q4
  • ) 16:45 NZD CPI (YoY) (Q4)
  • 17:00 AUD Manufacturing PMI
  • 17:00 AUD Services PMI
  • 18:30 JPY CPI(MoM) (Dec)
  • 19:30 JPY Manufacturing PMI (Jan)
  • 19:30 JPY Services PMI
  • 19:30 SGD URA Property Index (QoQ) (Q4)
  • 21:00 NZD Credit Card Spending (YoY)

Friday Jan 24, 2020

  • All Day Holiday China – Spring Festival
  • All Day Holiday South Korea – New Year
  • 00:00 SGD Industrial Production (MoM) (Dec)
  • 03:00 CHF World Economic Forum Annual Meetings
  • 03:00 EUR Spanish PPI (YoY)
  • 03:15 EUR French Manufacturing PMI (Jan)
  • 03:15 EUR French Markit Composite PMI (Jan)
  • 03:15 EUR French Services PMI (Jan)
  • 03:30 EUR German Composite PMI (Jan)
  • 03:30 EUR German Manufacturing PMI (Jan)
  • 03:30 EUR German Services PMI (Jan)
  • 04:00 EUR Italian Trade Balance Non-EU (Dec)
  • 04:00 EUR Manufacturing PMI (Jan)
  • 04:00 EUR Markit Composite PMI (Jan)
  • 04:00 EUR Services PMI (Jan)
  • 04:30 GBP Composite PMI
  • 04:30 GBP Manufacturing PMI
  • 04:30 GBP Services PMI
  • 04:30 EUR ECB President Lagarde Speaks
  • 08:30 CAD Retail Sales (MoM) (Nov)
  • 09:45 USD Manufacturing PMI (Jan)
  • 09:45 USD Markit Composite PMI (Jan)
  • 09:45 USD Services PMI (Jan)
  • 13:00 USD U.S. Baker Hughes Total Rig Count
  • 14:30 USD CFTC Speculative net positions

Saturday, Jan 25, 2020

  • All Day Holiday China – Spring Festival

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!

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