Market Weekly: September 29 – October 5 2019

Join us in our weekly market thread.

Where have we been and where are we going? Join our weekly market thread on Traders Community…

FEAR NOT Brave Investors

 Pelosi Gavel

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 Jobs

The Week That Was:

Best described as a chaotic week with POTUS being investigated for impeachment over what appears to what former VP Biden admits to, further splintering the American people along partisan lines. We had oil completely reverse 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 US increased sanctions on Iran and announced they will be sanctioning a Chinese shipping line which sent freight rates soaring, in the midst of a trade war putting more pressure on the global economy..

Stock markets wobbled with all the negative aspects out there, not least the interest rate on 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 since last Tuesday 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. The week begins with readings for factory sector activity in China and the euro area followed by the US and UK on Tuesday.We also have a slew of Fed speakers including chairman Powell and the RBA interest rate decision.

In the U.S. investors will be watching data that can help us gauge trade war fallout. The Institute for Supply Management (ISM) releases its purchasing managers index (PMI) for September on Tuesday. The manufacturing sector, which accounts for about 12% of the U.S. economy contracted in for the first time in 3-1/2 years in August with the export component hitting a more than 10-year low 43.3. In August manufacturers told ISM “business is starting to show signs of a broad slowdown,” and that “tariffs continue to be a strain on the supply chain and the economy overall.”

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 follows the unexpectedly soft August report. Eyes are 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 German Import Price Index and Unemployment Rate, UK GDP with the Chicago PMI in the US
  • Tuesday US, EU and German PMI Manufacturing US Auto Sales, Construction Spending and ISM Manufacturing and Prices Paid
  • Wednesday UK PMI Construction, US MBA Mortgage Applications
  • Thursday German, EU and US Composite and Services PMI, EU Producer Price Index and Retail Sales
  • Friday US Trade and Employment, 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 last week included; Nike NKE, Autozone AZO, THS Markit INFO, Cintas CTAS, Carmax KMX, Jabil JBL, Blackberry BB, Manchester United MANU KB Home KBH, VF Corp Accenture ACN, Micron Technology MU, Conagra CAG, Rite Aid RADBoston Scientific BSX

We start off on Monday with: Thor Industries

Tuesday Earnings Include: McCormick, Stitch Fix

Wednesday Earnings Include: Lennar, Bed Bath & Beyond

Thursday Earnings Include: PepsiCo, Constellation Brands, Costco

Friday Earnings Include: na

-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 Stocks D 9 27 19

Which Stocks Moved US ETF’s Last Week

 US Top 5 ETF Stocks D 9 27 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.

 US Markets Performance 9 27 2019

S&P 500

The $SPX continues to trade off our daily speed lines closed under daily tenkan, tested the recent breakup, needs to hold next speed line. The pennant with the bullish euphoria having the hall marks of an ABC double zig zag.through 61.8% with alternatives as complete or continuing.  Note developing pennant (pink) 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 9 27 19

On the weekly SPX we see chaotic moves, with the Kijun and tenkan flattening below under the upper channel line. Off +2/8 Murrey Math recalc confluence under 50 wma with the cloud and channel much lower.

 MW SPX W 9 27 19

Apple $AAPL

 MW AAPL W 9 27 19

Amazon $AMZN

 MW AMZN W 9 27 19

Fixed Interest

10 Year Treasury Note

MW TNX W 9 27 19

Energy and Commodities

US Crude Oil (WTI)

After WTI gapped up through all resistance through channel, cloud, 50dma, kijun and daily tenkan it collpased to feel the gap, impulse meaning a C or (Y) complete – bullish case would be a developing X, Finished at outer Gann channel under +4/8  It reversed sharply under tanken to kijun as Chikou rebalanced.  

MW WTI D 9 27 19

WTI spat the weekly 61.8% and trend on the gap up. Reversed back under Tenkan, Kijun and 50wma (green) under the cloud after rejecting the break retest.  Clear 3 waves.  Key From Last Week ” Expect more work and volatility. Watch Murrey confluence with the cloud acting.”

 MW WTI W 9 27 19

US Natural Gas (Henry Hub)

Natural Gas corrected off first target at Murrey +3/8 testing the tenkan in iv of (C) or (1). Below the Kijun at 50 dma needs to spit here otherwise X correction likely with daily cloud. Chikou rebalanced and TEnkan resistance above.

MW NG D 9 27 19

Natural Gas spat the weekly 50wma and 3/8 confluence. Below we tested the tenkan and Kijun – watch for kiss or crossover.  Resistance MM & 50wma, support the weekly channel and the tenkan 

MW NG W 9 27 19

Baltic Dry Index (BDI)

MW BDI W 9 27 19

Precious Metals


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 9 27 19


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 9 27 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 9 27 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 9 27 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 9 27 19


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 9 27 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 9 27 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 9 27 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 9 27 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 9 27 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 9 27 19

The Week Ahead

Key US Economic and Central Bank Events This Week

Sun Sept 29, 2019

  • 14:00 EUR ECB’s Lautenschlaeger Speaks
  • 17:45 NZD Building Consents (MoM) (Aug)
  • 19:00 KRW Industrial Production (MoM) (Aug)
  • 19:00 KRW Retail Sales (MoM)
  • 19:00 KRW Service Sector Output (MoM) (Aug)
  • 19:50 JPY BoJ Summary of Opinions
  • 19:50 JPY Capacity Utilization (MoM) (Aug)
  • 19:50 JPY Industrial Production (MoM) (Aug)
  • 19:50 JPY Industrial Production forecast 1m ahead (MoM) (Sep)
  • 19:50 JPY Industrial Production forecast 2m ahead (MoM) (Oct)
  • 19:50 JPY Retail Sales (YoY) (Aug)
  • 20:00 NZD ANZ Business Confidence (Sep)
  • 20:00 NZD NBNZ Own Activity (Sep)
  • 21:00 AUD MI Inflation Gauge (MoM)
  • 21:00 CNY Chinese Composite PMI (Sep)
  • 21:00 CNY Manufacturing PMI (Sep)
  • 21:00 CNY Non-Manufacturing PMI (Sep)
  • 21:30 AUD Housing Credit (Aug)
  • 21:30 AUD Private Sector Credit (MoM) (Aug)
  • 21:45 CNY Caixin Manufacturing PMI (Sep)
  • 22:00 SGD Bank Lending (Aug)

Monday, Sept 30, 2019

  • 01:00 JPY Construction Orders (YoY)
  • 01:00 JPY Housing Starts (YoY) (Aug)
  • 02:00 GBP Nationwide HPI (MoM) (Sep)
  • 02:00 EUR German Import Price Index (MoM) (Aug)
  • 02:00 EUR German Retail Sales (MoM) (Aug)
  • 03:00 CHF KOF Leading Indicators (Sep)
  • 03:00 EUR Spanish CPI (MoM)
  • 03:00 EUR Spanish GDP (QoQ) (Q2)
  • 03:00 EUR Spanish HICP (MoM)
  • 03:55 EUR German Unemployment
  • 04:00 EUR Italian Unemployment
  • 04:00 EUR Spanish Current account (Jul)
  • 04:30 GBP BoE Consumer Credit (Aug)
  • 04:30 GBP Business Investment (QoQ) (Q2)
  • 04:30 GBP Current Account (Q2)
  • 04:30 GBP GDP (QoQ) (Q2)
  • 04:30 GBP Mortgage Approvals (Aug)
  • 04:30 GBP Mortgage Lending (Aug)
  • 05:00 EUR Italian CPI (MoM) (Sep)
  • 05:00 EUR Italian HICP (MoM) (Sep)
  • 05:00 EUR Unemployment Rate (Aug)
  • Tentative USD OPEC Meeting
  • 08:00 EUR German CPI (MoM) (Sep)
  • 08:30 CAD IPPI (MoM) (Aug)
  • 08:30 CAD RMPI (MoM) (Aug)
  • 09:45 USD Chicago PMI (Sep)
  • 10:30 USD Dallas Fed Mfg Business Index (Sep)
  • 11:30 USD 3-Month Bill Auction
  • 11:30 USD 6-Month Bill Auction
  • 17:00 KRW Manufacturing BSI Index (Oct)
  • 17:00 NZD NZIER Business Confidence (Q3)
  • 17:00 NZD NZIER QSBO Capacity Utilization (Q3)
  • 18:30 AUD AIG Manufacturing Index (Sep)
  • 19:00 KRW CPI (MoM) (Sep)
  • 19:00 AUD Manufacturing PMI
  • 19:30 JPY Jobs/applications ratio (Aug)
  • 19:30 JPY Unemployment Rate (Aug)
  • 19:50 JPY Tankan Report
  • 20:00 KRW Trade Balance (Sep)
  • 20:30 KRW Nikkei Manufacturing PMI (Sep)
  • 20:30 JPY Manufacturing PMI (Sep)
  • 21:30 AUD Building Approvals (MoM) (Aug)
  • 21:30 AUD Private House Approvals (Aug)

Tuesday Oct 1,2019

  • All Day Holiday Hong Kong – National Day
  • All Day Holiday China – National Day
  • 00:30 AUD RBA Interest Rate Decision (Oct)
  • 00:30 AUD RBA Rate Statement
  • 02:00 GBP Nationwide HPI (MoM) (Sep)
  • 02:30 CHF Retail Sales (YoY) (Aug)
  • 02:30 AUD Commodity Prices (YoY)
  • 03:15 EUR Spanish Manufacturing PMI (Sep)
  • 03:30 CHF PMI (Sep)
  • 03:45 EUR Italian Manufacturing PMI (Sep)
  • 03:50 EUR French Manufacturing PMI (Sep)
  • 03:55 EUR German Manufacturing PMI (Sep)
  • 04:00 EUR Manufacturing PMI (Sep)
  • 04:30 GBP Manufacturing PMI (Sep)
  • 05:00 EUR CPI (YoY) (Sep)
  • 08:30 CAD GDP (MoM) (Jul)
  • 08:55 USD Redbook (MoM)
  • 09:30 CAD RBC Manufacturing PMI (Sep)
  • 09:45 USD Manufacturing PMI (Sep)
  • 10:00 USD Construction Spending (MoM) (Aug)
  • 10:00 USD ISM Manufacturing PMI (Sep)
  • 10:30 USD Dallas Fed Services Revenues (Sep)
  • 10:30 USD Texas Services Sector Outlook (Sep)
  • Tentative NZD GlobalDairyTrade Price Index
  • 16:30 USD API Weekly Crude Oil Stock
  • 19:00 GBP BRC Shop Price Index (YoY)
  • 19:50 JPY Monetary Base (YoY)
  • 21:30 AUD RBA Chart Pack Release

Wednesday, Oct 2, 2019

  • All Day Holiday China – National Day
  • All Day Holiday India – Mahatma Gandhi Jayanthi
  • 01:00 JPY Household Confidence (Sep)
  • 02:30 CHF CPI (MoM) (Sep)
  • 03:00 EUR Spanish Unemployment Change
  • 04:30 GBP BoE FPC Meeting Minutes
  • 04:30 GBP Construction PMI (Sep)
  • 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
  • 08:15 USD ADP Nonfarm Employment Change (Sep)
  • 09:00 SGD Manufacturing PMI
  • 09:45 USD ISM-New York Index (Sep)
  • 10:30 USD Crude Oil Inventories
  • 18:30 AUD AIG Services Index (Sep)
  • 19:00 AUD Services PMI
  • 20:30 JPY Services PMI (Sep)
  • 21:00 JPY BOJ Board Member Funo Speaks
  • 21:30 AUD Trade Balance (Aug)

Thursday Oct 3, 2019

  • All Day Holiday South Korea – National Foundation Day of Korea
  • All Day Holiday China – National Day
  • All Day Holiday Germany – Unification Day
  • 03:15 EUR Spanish Services PMI (Sep)
  • 03:45 USD Chicago Fed President Evans Speaks
  • 03:45 EUR Italian Composite PMI (Sep)
  • 03:45 EUR Italian Services PMI (Sep)
  • 03:45 EUR ECB’s De Guindos Speaks
  • 03:50 EUR French Markit Composite PMI (Sep)
  • 03:50 EUR French Services PMI (Sep)
  • 03:55 EUR German Composite PMI (Sep)
  • 03:55 EUR German Services PMI (Sep)
  • 04:00 EUR Markit Composite PMI (Sep)
  • 04:00 EUR Services PMI (Sep)
  • 04:30 GBP Composite PMI (Sep)
  • 04:30 GBP Services PMI (Sep)
  • 05:00 EUR PPI (MoM) (Aug)
  • 05:00 EUR Retail Sales (MoM) (Aug)
  • 07:30 USD Challenger Job Cuts (Sep)
  • 08:30 USD Continuing Jobless Claims
  • 08:30 USD FOMC Member Quarles Speaks
  • 08:30 USD Initial Jobless Claims
  • 08:30 USD Jobless Claims 4-Week Avg
  • 09:00 SGD Manufacturing PMI (Aug)
  • 09:45 USD Markit Composite PMI (Sep)
  • 09:45 USD Services PMI (Sep)
  • 10:00 USD Durables Excluding Defense (MoM) (Aug)
  • 10:00 USD Factory Orders (MoM) (Aug)
  • 10:00 USD ISM Non-Manufacturing PMI (Sep)
  • 10:30 USD Natural Gas Storage
  • 11:30 USD 4-Week Bill Auction
  • 11:30 USD 8-Week Bill Auction
  • 12:10 USD FOMC Member Mester Speaks
  • 15:00 USD Total Vehicle Sales
  • 18:35 USD FOMC Member Clarida Speaks
  • 20:30 HKD Manufacturing PMI (Sep)
  • Tentative AUD HIA New Home Sales (MoM)
  • 21:30 AUD RBA Financial Stability Review
  • 21:30 AUD Retail Sales (MoM) (Aug)
  • 23:20 AUD RBA Assist Gov Ellis Speaks

Friday Oct 4, 2019

  • All Day Holiday China – National Day
  • 02:45 EUR French Government Budget Balance (Aug)
  • 04:00 EUR Italian Public Deficit (Q2)
  • 04:30 GBP Housing Equity Withdrawal (QoQ)
  • 07:25 EUR ECB’s De Guindos Speaks
  • 08:30 USD Average Hourly Earnings (MoM) (Sep)
  • 08:30 USD Average Weekly Hours (Sep)
  • 08:30 USD Government Payrolls (Sep)
  • 08:30 USD Manufacturing Payrolls (Sep)
  • 08:30 USD Nonfarm Payrolls (Sep)
  • 08:30 USD Participation Rate (Sep)
  • 08:30 USD Private Nonfarm Payrolls (Sep)
  • 08:30 USD Trade Balance (Aug)
  • 08:30 USD U6 Unemployment Rate (Sep)
  • 08:30 USD Unemployment Rate (Sep)
  • 08:30 CAD Trade Balance (Aug)
  • 10:00 CAD Ivey PMI (Sep)
  • 10:25 USD FOMC Member Bostic Speaks
  • 13:00 USD U.S. Baker Hughes Rig Count
  • 14:00 USD Fed Chair Powell Speaks
  • 14:10 USD FOMC Member Brainard Speaks
  • 15:30 USD CFTC Speculative net positions
  • 16:00 USD FOMC Member Clarida Speaks
  • 16:00 USD FOMC Member Quarles Speaks


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!

Leave a Reply

Your email address will not be published. Required fields are marked *