Market Weekly: October 13 – 19 2019

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FEAR NOT Brave Investors

 Banks Earnings

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

Impeachment, Trade Wars and Bank Earnings

The Week That Was:

Volatilty reigned supreme again as we headed into what the talking heads billed as, another season ending US v China trade meeting, is this the longest season of anything you have ever seen? We saw index futures move up and down in 1% moves almost daily on Trump tweets and China headlines, by the close of the week the S&P 500 reached a level less than 50 handles off it’s all time high.  The week began positively after last week’s goldilocks jobs data  and Fed chair Powell backed that scenario with his comments on earnings, rates and the likelihood of Fed cuts On Friday the Fed announced they will be injecting 60 Billion into the system to maintain liquidity, making the point that it is not QE4 however! Why are talking about lower rates and liquidity so close to record highs we ask?

Front and center in the US we have the growing antagonistic and partisan split of the impeachment od the POTUS, in the UK and Europe we have the daily Brexit No Deal on or off. Geoplitically we have the fallout from Trump ordering US troops out of Northern Syria and  almost immediately Turkey bombing Kurd soldier positions. The US reacted by putting financial sanctions on the Turks but not making them actionable. What was intriguing to many was the rebuke of Trump’s actions removing tropps, there was just 150 there, by all Democrats and a number of Republicans. Obviously most of that is politically charged but the underlying factor is the Industrial Military complex support and Trump did promise to pull out of endless wars. Then Trump said the US would said 1500 troops to Saudi Arabia, confused yet?

On Friday we saw oil close at week highs over $54.50 after news that a Iranian tanker was supposedly hit by missiles in the red sea, continued unrest in Baghdad and a risk on follow through on the China deal bet. The market was weighed down by record US Production and the IEA, EIA and OPEC all lowering demand forecasts.  The biggest movers there was in agriculture commodities with corn and soybean futures up over 4% on Friday.  On oil remember that it had dropped $13 or twenty percent after speculators bet wrongly on 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  

The Fed did react to the 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 as repo and other money market rates soared to levels not seen since the height of the global financial crisis in 2008. They responded to continue injected $60 billion a month for the next 6 months. 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.  Apple surging to record highs Friday as trade deal and iPhone speculation mounted.

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 “phase one” of the& U.S. China trade talks. The stock market will open for regular trading hours, but the bond market will not for Columbus Day on Monday. In the UK British lawmakers continue to work on a long-debated Brexit deal that would make way for the United Kingdom to leave the European Union. 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 European Industrial Production, RBA Meeting Minutes China CPI and PPI, South Korean Trade Balance
  • Tuesday Japan Industrial Production, UK Employment, EU and German ZEW Current Conditions and Economic Sentiment, South Korea Interest Rate Decision
  • Wednesday EU Car Registration. UK CPI and PPI. EU Trade Balance, US Retail Sales. MBA Mortgage Applications, NAHB Housing Market Index, Beige Book. TIC Report, API Weekly Crude Oil Stock, Australia Employment, Singapore Trade Balance
  • Thursday UK Retail Sales, US Building Permits, Housing Starts, Jobless Claims, Philadelphia Fed Manufacturing Index, US Capacity Utilization, Industrial Production, Natural Gas Storage, USD Crude Oil Inventories, Canada ADP Nonfarm Employment, Japan Trade Balance, China GDP, Industrial Production, Retail Sales, Unemployment Rate
  • Friday EU Current Account. Treasury Department Report, 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 wars.

Earnings The earnings reporting period begins with big banks including JPMorgan Chaseand others reporting on Oct. 15. Last week included; Domino’s Pizza, Levi’s, Delta Air Lines, Hormel Foods and the Wendy’s analyst meeting

We start off on Monday with:

Tuesday Earnings Include: J.P. Morgan, Citigroup, Goldman Sachs, Wells Fargo, United Health, Johnson & Johnson, Workday

Wednesday Earnings Include: Bank of America, IBM, Netflix

Thursday Earnings Include: Honeywell, Union Pacific

Friday Earnings Include: Schlumberger, Coca-Cola, American Express

-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*

 MW TOP 5 stocks 10 11 19

Which Stocks Moved US ETF’s Last Week

 MW TOP 5 ETF stocks 10 11 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 11 19

S&P 500

No surprise in the bounce given $SPX traded down with momentum in 3 waves to reverse at Chikou and spat 2 trend lines back up over the Kijun and daily tenkan, tested the recent breakup. Critical at week end it closed under 50 dm 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 or up. 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 11 19

Last week we saw 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. On the flip side the retest of the 50wma under the larger channel and +2/8 Murrey Math recalc confluence under 50 wma with the cloud and channel much lower cautions bulls.

 MW SPX W 10 11 19

Apple $AAPL

 MW AAPL W 10 11 19

Amazon $AMZN

 MW AMZN W 10 11 19

Fixed Interest

10 Year Treasury Note

MW TNX W 10 11 19

Energy and Commodities

US Crude Oil (WTI)

After WTI filled the gap without any resistance quickly completing a fractal spit per Adam’s Theory it has built an ABC or 1-2 i ii of 3 in consolidation with the $ES_F supporting reflecting mindless speculation from the herd. From there CL_F is trying to find balance with the chikou and popped the tenkan with Kijun and 50 dma above. The impulse meant a C or (Y) complete – bullish case would be a developing X 

MW CL D 10 11 19

After WTI spat the weekly 61.8% momentum continued with power through the gap up and Reversed back under Tenkan, Kijun and 50wma (green) under the cloud after rejecting the break retest from there we have found support at previous spit zone get back out with tenkan, Kijun and 50wma all above.

 MW CL W 10 11 19

US Natural Gas (Henry Hub)

Natural Gas is correcing the cloud from underneath since reversing off Murrey +3/8 and the tenkan in iv of (C) or (1). and support failing note bounced off breakup line (white) before retest here. – either a iv or X i sequence   Chikou rebalanced and Tenkan 50 dma resistance above held. 

 MW NG D 10 11 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. Watch Kijun/Tenkan cross here  Resistance MM & Kijun 50wma, support the weekly channel
 MW NG W 10 11 19

Baltic Dry Index (BDI)

MW BDI W 10 11 19

Precious Metals


Gold bounced after 3 waves into the Tenkan but quickly came off to form a higher degree (a) of the B of the 4 – key is the recent lows at tenkan for whether this is 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 11 19


Silver after it rallied in 3 waves to retest the September 2017 breakdown has been correcting the impulse with impulse reversal – meaning C or 3 and we came back to rebalance Chikou and bounced through tenkan and 38% to spit those levels  We watch recent lows if this a 1 down or more – watch lower fibs with Kijun below.

 MW Silver W 10 11 19

Currency Markets

Australian Dollar – AUDUSD

The Aussie dollar impulse reversed through the tenkan with Kijun and daily cloud above after the oversold -1/8 Murrey Math slingshot through a bullflag. Still much repair work to be done into the cloud to get a meaningful bounce in with flat Kijun pulling.

MW AUD W 10 11 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 holding at tenkan at week’s end. 

MW NZD W 10 11 19

Canadian Dollar – USDCAD

The USDCAD bounce failed at 50% and fell back through top of cloud and tenkan Kijun and 50 wma. 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 11 19


Euro recovered but again Tenkan helfd back for now halting recovery 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 11 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 11 19
 Japanese Yen – USDJPY

The dollar yen recovery reflects trade war – here we aback at the weekly Kijun and downtrend. Tenkanheld break cleanly needed 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 11 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 but has distanced itself.

MW MXN W 10 11 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 before breaking out as the Kurds Turkey conflict heated up.. It has bounced from the cloud base to the top of new chaanel.

 MW TRY D 10 11 19


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 12 19

The Week Ahead

Key US Economic and Central Bank Events This Week

Sun October 13, 2019

  • 20:00 SGD GDP (QoQ) (Q3)
  • 20:00 SGD GDP (YoY) (Q3)
  • 22:30 CNY Exports (YoY)
  • 22:30 CNY Imports (YoY)
  • 23:00 CNY Trade Balance (USD)

Monday, Oct 14, 2019

  • All Day Holiday Canada – Thanksgiving Day
  • All Day Holiday Japan – Health-Sports Day
  • 02:00 EUR German WPI (MoM) (Sep)
  • 03:00 CNY FDI 05:00 CNY M2 Money Stock (YoY)
  • 05:00 CNY New Loans
  • 05:00 CNY Outstanding Loan Growth (YoY)
  • 05:00 CNY Chinese Total Social Financing
  • 05:00 EUR Industrial Production (MoM) (Aug)
  • 14:00 USD Federal Budget Balance
  • 17:45 NZD External Migration & Visitors (Aug)
  • 17:45 NZD Permanent/Long-Term Migration (Aug)
  • 17:45 NZD Visitor Arrivals (MoM)
  • 20:30 AUD RBA Meeting Minutes
  • 21:30 CNY CPI (MoM) (Sep)
  • 21:30 CNY PPI (YoY) (Sep)
  • 22:00 KRW Trade Balance (Sep)
  • 22:00 NZD RBNZ Offshore Holdings (Sep)
  • 23:00 KRW M2 Money supply (Aug)

Tuesday Oct 15,2019

  • 00:30 JPY Capacity Utilization (MoM) (Aug)
  • 00:30 JPY Industrial Production (MoM) (Aug)
  • 00:30 JPY Tertiary Industry Activity Index (MoM)
  • 02:30 CHF PPI (MoM) (Sep)
  • 02:45 EUR French CPI (MoM) (Sep)
  • 04:30 GBP Average Earnings
  • 04:30 GBP BoE FPC Meeting Minutes
  • 04:30 GBP Employment
  • 05:00 EUR German ZEW Current Conditions (Oct)
  • 05:00 EUR German ZEW Economic Sentiment (Oct)
  • 05:00 EUR ZEW Economic Sentiment (Oct)
  • 06:00 EUR Reserve Assets Total (Sep)
  • 08:30 USD NY Empire State Manufacturing Index (Oct)
  • 08:55 USD Redbook (MoM)
  • 10:30 NZD GlobalDairyTrade Price Index
  • 11:30 USD 3-Month Bill Auction
  • 11:30 USD 6-Month Bill Auction
  • 17:00 KRW Export Price Index (YoY) (Sep)
  • 17:00 KRW Import Price Index (YoY) (Sep)
  • 17:45 NZD CPI (QoQ) (Q3)
  • 19:00 KRW Unemployment Rate (Sep)
  • 19:30 AUD MI Leading Index (MoM)
  • 21:00 KRW Interest Rate Decision (Oct)

Wednesday, Oct 16, 2019

  • 02:00 GBP Car Registration (MoM) (Sep)
  • 02:00 EUR Italian Car Registration (MoM) (Sep)
  • 02:00 EUR German Car Registration (MoM) (Sep)
  • 02:00 EUR French Car Registration (MoM) (Sep)
  • 02:00 EUR French Car Registration (YoY) (Sep)
  • 04:00 EUR Italian Industrial New Orders (MoM) (Aug)
  • 04:00 EUR Italian Industrial Sales (MoM) (Aug)
  • 04:30 GBP CPI (MoM) (Sep)
  • 04:30 GBP PPI Input (MoM) (Sep)
  • 04:30 GBP PPI Output (MoM) (Sep)
  • 04:30 GBP RPI (MoM) (Sep)
  • 05:00 EUR Italian CPI (MoM) (Sep)
  • 05:00 EUR Italian HICP (MoM) (Sep)
  • 05:00 EUR CPI (MoM) (Sep)
  • 05:00 EUR Trade Balance (Aug)
  • 05:40 EUR German 30-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
  • 08:30 USD Retail Sales (MoM) (Sep)
  • 08:30 CAD CPI (MoM) (Sep)
  • 08:30 CAD Foreign Securities Purchases (Aug)
  • 08:30 CAD Foreign Securities Purchases by Canadians (Aug)
  • 10:00 USD Business Inventories (MoM) (Aug)
  • 10:00 USD NAHB Housing Market Index (Oct)
  • 10:00 USD Retail Inventories Ex Auto (Aug)
  • 14:00 USD Beige Book
  • 16:00 USD US Foreign Buying, T-bonds (Aug)
  • 16:00 USD Overall Net Capital Flow (Aug)
  • 16:00 USD TIC Net Long-Term Transactions (Aug)
  • 16:00 USD TIC Net Long-Term Transactions including Swaps (Aug)
  • 16:30 USD API Weekly Crude Oil Stock
  • 20:30 AUD Employment Change (Sep)
  • 20:30 AUD Full Employment Change (Sep)
  • 20:30 AUD Participation Rate (Sep)
  • 20:30 AUD Unemployment Rate (Sep)
  • 20:30 SGD Trade Balance

Thursday Oct 17, 2019

  • 02:00 CHF Trade Balance (Sep)
  • 04:00 EUR Italian Trade Balance (Aug)
  • 04:00 HKD Exports (MoM) (Sep)
  • 04:00 HKD Imports (MoM) (Sep)
  • 04:30 GBP BOE Credit Conditions Survey
  • 04:30 GBP Retail Sales (MoM) (Sep)
  • 05:00 EUR Construction Output (MoM) (Aug)
  • 08:30 USD Building Permits (MoM) (Sep)
  • 08:30 USD Continuing Jobless Claims
  • 08:30 USD Housing Starts (MoM) (Sep)
  • 08:30 USD Initial Jobless Claims
  • 08:30 USD Jobless Claims 4-Week Avg.
  • 08:30 USD Philadelphia Fed Manufacturing Index (Oct)
  • 08:30 CAD ADP Nonfarm Employment Change
  • 08:30 CAD Manufacturing Sales (MoM) (Aug)
  • 09:15 USD Capacity Utilization Rate (Sep)
  • 09:15 USD Industrial Production (MoM) (Sep)
  • 09:15 USD Manufacturing Production (MoM) (Sep)
  • 10:30 USD Natural Gas Storage
  • 11:00 USD Crude Oil Inventories
  • 11:30 USD 4-Week Bill Auction
  • 11:30 USD 8-Week Bill Auction
  • 19:30 JPY CPI
  • 19:50 JPY Trade Balance (Sep)
  • 22:00 CNY Fixed Asset Investment (YoY) (Sep)
  • 22:00 CNY GDP (QoQ) (Q3) 1.5%
  • 22:00 CNY Industrial Production (YoY) (Sep)
  • 22:00 CNY Retail Sales (YoY) (Sep)
  • 22:00 CNY Chinese Unemployment Rate
  • 22:00 CNY NBS Press Conference

Friday Oct 18, 2019

  • 02:00 EUR German WPI (MoM) (Sep)
  • 04:00 EUR Current Account (Aug)
  • 04:30 HKD Unemployment Rate (Sep)
  • Tentative USD OPEC Meeting
  • 13:00 USD U.S. Baker Hughes Oil Rig Count
  • 15:30 USD CFTC Speculative net positions Tentative
  • USD Treasury Department Report


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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