Market Weekly: October 20 – 26 2019

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FEAR NOT Brave Investors

No deal Brexit 

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

Brexit Deal or No Deal?, World Series and Earnings

The Week That Was:

Volatilty moved to the currency markets this week as the Brexit date nears closer with the British Pound rising sharply on hopes of a deal. In the markets were calmer as earnings season began with the big banks largely meeting expectations.  At the close of the week the S&P 500 was less than 50 handles off it’s all time high.  The market continues to be underpinned by the Fed injecting 60 Billion into the system to maintain liquidity, in its not QE4 program. Oil continues in the doldrums, natural gas is showing some life as winter approaches and coal continues to flounder as news of America’s largest underground coal miner nears bankruptcy.

Poltically we have thee growing antagonistic and partisan split of the impeachment of 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. Domestically a news fatigued market will likely focus on the baseball world series between the Houston Astros and Washington Nationals this week, tired from Brexit, China, Kurd and impeachment news.

Oil continues to be weighed down by record US Production and from last week the IEA, EIA and OPEC all lowering demand forecasts.   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 reported its Beige Book with little new pointers about the economy, this the newlyinjected $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, Turkey, 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 again. 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. Over in Canada we have a federal election. Eyes will be on the ECB meeting and global manufacturing and Service PMIs. 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 Canada Federal Elections, German PPI and German Bundesbank Monthly Report, More Brexit negotiations, US Federal Budget Balance
  • Tuesday Holiday Japan, UK Parliment vote on Brexit deal series of amendments, Canadian Retail Sales and BoC Business Outlook Survey, US Existing Home Sales, Richmond Manufacturing Index, API Weekly Crude Oil Stock, New Zealand Trade Balance
  • Wednesday French Business Survey, US MBA Mortgage Applications, House Price Index, EIA Crude Oil Inventories, South Korea GDP, Australia Manufacturing and Services PMI, Japan Manufacturing and Services PMI
  • Thursday French Manufacturing and Services PMI, BoE FPC Meeting Minutes, German Manufacturing and Services PMI, Hong Kong Trade Balance, EU Manufacturing, Composite and Services PMI, ECB Interest Rate Decision and Press Conference, USD Durable Goods, Jobless Claims, Manufacturing and Services PMI, New Home Sales, EIA Natural Gas Storage, KC Fed Manufacturing Index
  • Friday Singapore Industrial Production, GfK German Consumer Climate, French and Spanish PPI, Italian Trade Balance, German Business Expectations, Current Assessment and Ifo Business Climate Index, France Jobseekers, US Michigan Consumer Sentiment, Canada Budget Balance, Baker Hughes Oil Rig Count, CFTC Speculative net positions, US Treasury Department Report and on Saturday, Oct 26, 2019 Chinese Industrial profit

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 began with big banks including JPMorgan Chase and others reporting on last week including; J.P. Morgan, Citigroup, Goldman Sachs, Wells Fargo, PNC, United Health, Johnson & Johnson, CSX, Workday, Bank of America, IBM, Netflix, Honeywell, Union Pacific, Schlumberger, Coca-Cola, and American Express

We start off on Monday with: Halliburton, TD Ameritrade, SAP SE

Tuesday Earnings Include: McDonald’s, Kimberly-Clark, United Technologies, Chipotle Mexican Grill, UPS, Procter & Gamble, Travelers, Centene, Lockheed Martin, Discover Financial Services, Hasbro and Kimberly-Clark

Wednesday Earnings Include: Boeing, Caterpillar, Waste Management, Thermo Fisher, Microsoft, PayPal, Anthem, Blackstone, Boston Scientific, Canadian Pacific, Cleveland-Cliffs, eBay, Edwards Lifesciences, Eli Lilly, Equifax, F5 Networks, Ford,Tesla and General Dynamics

Thursday Earnings Include: Intel, Visa, Amazon, Comcast, Raytheon, Southwest Airlines, T-Mobile), Twitter and Northrop Grumman

Friday Earnings Include: Anheuser Busch, VF Corp and Verizon

-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 18 19

Which Stocks Moved US ETF’s Last Week

 MW TOP 5 ETF stocks 10 18 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 18 19

S&P 500

 $SPX spent all week in a tight range consolidating recent gains – given the 3 waves from here we watch impulse and hugging of daily speed lines. Chikou rebalanced and Kijun and daily tenkan are support. Critical at week end it closed under 50 dm at the relapsed speed line. Clearly bullish euphoria

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 18 19

Weekly SPX  after spat the trend line and back up through the Kijun and tenkan retains energy 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 18 19

Apple $AAPL

 MW AAPL W 10 18 19

Amazon $AMZN

 MW AMZN W 10 18 19

Fixed Interest

10 Year Treasury Note

MW TNX W 10 18 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 18 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 18 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 18 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)


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 18 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 18 19

Currency Markets

Australian Dollar – AUDUSD

The Aussie dollar impulse rally continued after 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 18 19

New Zealand Dollar – NZDUSD

The Kiwi followed the AUDUSD through the Tenkan higher. Weekly channel in focus with tenkan now support. Chikou under previous lows key at week’s end. 

MW NZD W 10 18 19

Canadian Dollar – USDCAD

After USDCAD bounce failed at 50% and fell back through top of cloud and tenkan Kijun and 50 wma we see Loonie testing trendline and weekly pennant ahead of Canadian election The tenkan is now seen as the pivot aspect. Support is previous lows.

MW CAD W 10 18 19


Euro continued recovery off channel to Kijun and Fib as Pound extended gains. Support now Tenkan  with 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 and EURGBP.

MW EUR W 10 18 19

EuroPound – EURGBP

EURGBP is down sharply in 3 waves correcting the July breakup as the pound rallied in hopes of a Brexit deal. The weekly cloud gave way and found support at the May breakup to complete min for wave 2 reflecting the madness of Brexit politics. Resistance at chikou and Tenkan with support at channel.

MW EURGBP W 10 18 19
 Japanese Yen – USDJPY

The dollar yen recovery closed right at the weekly Kijun to end the week. The bounce came as Tenkan held to get legs higher with Kijun now key again. Yen buying continued on crosses, EURJPY and AUDJPY taking away the cloud twist that drew the dollar up.

MW JPY W 10 18 19

 Mexican Peso USDMXN

Mexican peso spat the upper channel and has come all the way back through the Kijun and tenkan to channel bottom which are now resistance. Support is previous lows.

MW MXN W 10 18 19

Turkish Lire USDTRY

The USD Turkish Lire corrected much of the emerging market downdraft and much of the Kurds sell off.  Back through the daily Kijun and tenkan which is now resistance.  Support is the channel.

 MW TRY D 10 18 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 19 19

The Week Ahead

Key US Economic and Central Bank Events This Week

Sun October 20, 2019

  • 11:00 USD IMF Meetings
  • 19:00 GBP Rightmove House Price Index (MoM)
  • 19:50 JPY Trade Balance (Sep)
  • 20:30 SGD URA Property Index (QoQ)
  • 21:30 CNY House Prices (YoY) (Sep)
  • 21:30 CNY PBoC Interest Rate
  • 22:00 NZD Credit Card Spending (YoY)

Monday, Oct 21, 2019

  • All Day Holiday India – Assembly Elections in Maharashtra
  • All Day CAD Canada Federal Elections
  • 00:30 JPY All Industries Activity Index (MoM)
  • 02:00 EUR German PPI (MoM) (Sep)
  • Tentative EUR German Buba Monthly Report
  • 11:30 USD 3-Month Bill Auction
  • 11:30 USD 6-Month Bill Auction
  • 14:00 USD Federal Budget Balance
  • 17:00 KRW PPI (MoM) (Sep)

Tuesday Oct 22,2019

  • All Day Holiday Japan – Holiday
  • 04:00 EUR Spanish Trade Balance
  • 04:00 EUR ECB Bank Lending Survey
  • 04:30 GBP Public Sector Net Borrowing (Sep)
  • 04:30 GBP Public Sector Net Cash Requirement (Sep)
  • 04:30 HKD CPI (YoY) (Sep)
  • Tentative GBP UK Parliment vote on Brexit deal series of amendments
  • 06:00 GBP CBI Industrial Trends Orders (Oct)
  • 08:30 CAD Retail Sales (MoM) (Aug)
  • 08:55 USD Redbook (MoM)
  • 10:00 USD Existing Home Sales (Sep)
  • 10:00 USD Richmond Manufacturing Index (Oct)
  • 10:00 USD Richmond Services Index (Oct)
  • 10:30 CAD BoC Business Outlook Survey
  • 13:00 USD 2-Year Note Auction
  • 16:30 USD API Weekly Crude Oil Stock
  • 17:45 NZD Trade Balance (MoM)

Wednesday, Oct 23, 2019

  • 01:00 SGD CPI (YoY) (Sep)
  • 02:45 EUR French Business Survey (Oct)
  • 05:40 EUR German 10-Year Bund Auction
  • Tentative USD OPEC Meeting
  • 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 CAD Wholesale Sales (MoM) (Aug)
  • 09:00 USD House Price Index (MoM) (Aug)
  • 10:00 EUR Consumer Confidence (Oct)
  • 10:30 USD Crude Oil Inventories
  • 13:00 USD 5-Year Note Auction
  • 19:00 KRW GDP (QoQ) (Q3)
  • 19:00 AUD Manufacturing PMI
  • 19:00 AUD Services PMI
  • 20:30 JPY Manufacturing PMI (Oct)
  • 20:30 JPY Services PMI

Thursday Oct 24, 2019

  • 01:00 JPY Leading Index 91.7 93.7
  • 03:00 EUR Spanish Unemployment Rate (Q3)
  • 04:15 EUR French Manufacturing PMI (Oct)
  • 04:15 EUR French Markit Composite PMI (Oct)
  • 04:15 EUR French Services PMI (Oct)
  • Tentative GBP BoE FPC Meeting Minutes
  • 04:30 EUR German Composite PMI (Oct)
  • 04:30 EUR German Manufacturing PMI (Oct)
  • 04:30 EUR German Services PMI (Oct)
  • 04:30 HKD Trade Balance
  • 05:00 EUR Manufacturing PMI (Oct)
  • 05:00 EUR Markit Composite PMI (Oct)
  • 05:00 EUR Services PMI (Oct)
  • 07:45 EUR Deposit Facility Rate (Oct)
  • 07:45 EUR ECB Marginal Lending Facility
  • 07:45 EUR ECB Monetary Policy Statement
  • 07:45 EUR ECB Interest Rate Decision (Oct)
  • 08:30 USD Continuing Jobless Claims
  • 08:30 USD Durable Goods Orders (MoM) (Sep)
  • 08:30 USD Initial Jobless Claims
  • 08:30 USD Jobless Claims 4-Week Avg.
  • 08:30 EUR ECB Press Conference
  • 09:45 USD Manufacturing PMI (Oct)
  • 09:45 USD Markit Composite PMI (Oct)
  • 09:45 USD Services PMI (Oct)
  • 10:00 USD New Home Sales (Sep)
  • 10:30 USD Natural Gas Storage
  • 11:00 USD KC Fed Composite Index (Oct)
  • 11:00 USD KC Fed Manufacturing Index (Oct)
  • 11:30 USD 4-Week Bill Auction
  • 11:30 USD 8-Week Bill Auction
  • 13:00 USD 7-Year Note Auction
  • 17:00 KRW Consumer Confidence (Oct)
  • 20:30 SGD URA Property Index (QoQ) (Q3)
  • 22:30 SGD Unemployment Rate

Friday Oct 25, 2019

  • 01:00 SGD Industrial Production (MoM) (Sep)
  • 02:00 EUR GfK German Consumer Climate (Nov)
  • 02:45 EUR French PPI (MoM) (Sep)
  • 03:00 EUR Spanish PPI (YoY)
  • 04:00 EUR Italian Trade Balance Non-EU (Sep)
  • 04:00 EUR German Business Expectations (Oct)
  • 04:00 EUR German Current Assessment (Oct)
  • 04:00 EUR German Ifo Business Climate Index (Oct)
  • 06:00 EUR France Jobseekers Total
  • 10:00 USD Michigan Consumer Sentiment (Oct)
  • 11:00 CAD Budget Balance (Aug)
  • 13:00 USD U.S. Baker Hughes Oil Rig Count
  • 15:30 USD CFTC Speculative net positions
  • Tentative USD Treasury Department Report

Saturday, Oct 26, 2019

  • 21:30 CNY Chinese Industrial profit (YoY) (Sep)
  • 21:30 CNY Chinese Industrial profit YTD (Sep)


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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