Indices

[Caseynotes]

6 minutes ago, dmedin said:

Well, would you recommend jumping on the cannabis index at this time? 

The chart seems to have broken down, lots of gaps and saying market not open to trade;

[dmedin]

I guess I'll wait.  It's an interesting idea.

[Caseynotes]

6 minutes ago, dmedin said:

I guess I'll wait.  It's an interesting idea.

It is, so instead of picking out individual companies you would be taking a position on the industry as a whole, and considering it's still early stage there should be quite a bit of upside.

Edited May 20, 2019 by Caseynotes

[dmedin]

Apropos of the US 500 and FTSE 100 indices, they have been swinging up and down so violently for the last four weeks I am again finding myself confused as to the best approach to take advantage of this volatility.  Is it a case of taking a day trading approach and following short term movements, entering and quickly exiting?   FX seems to work better with MAs and volume confirmation, but indices are really tricky to me.  (When they are not clearly trending)

[Caseynotes]

@dmedin, the best approach is to think the way the market works and that's by levels. Both bulls and bears want to control the market and know they need to act as a team to achieve that. So they set up orders at obvious target areas.

The 5 min dax chart from yesterday. There was the early morning battle for control of the daily pivot (blue), the bears won and so aimed for S1 (first green line) where they found the bulls waiting for contracts to buy, the bears won again so aimed for S2 (second green line), the bears won again so aimed for S3 but the move was interrupted by the arrival or reinforcements onto the battle field on the US open.

 

[Caseynotes]

The markets not sure which way to go at the moment so feeling out in both directions before drawing back to the start. Still 3 weeks to go of this hiatus in the trade war, will the future hold a increased tariffs to 25% on everything and the inevitable subsequent China retaliation? If so, China will need to expand the battlefield because they've run out of things to tariff so that will mean a radical escalation. 

[Caseynotes]

Minutes from the last FOMC meeting released today at 7pm may give more insight as to interest rate movement probabilities which is the second biggest market mover after trade war news at the moment.

The saber rattling gets louder as the US threatens to add 5 more Chinese tech companies to the blacklist.

Added for interest to the daily chart is MACD with divergence as the Mac has turned up and looking to cross the signal.  

[Caseynotes]

Ger and EU flash PMIs at 8:30 & 9:00 am, US PMIs at 2:00 & 2:45 pm. The consolidation of the last few days continues with lots of rumour and speculation as to trade war developments, will it escalate into a tech war, when is the next meeting.

Dow is bouncing between 25555 and 25956 with key support below at 25214. Dax moving sideways within it's rough channel. Ftse looks to be starting a down leg with the Times announcing May will resign on Friday while Nikkei hovers just above key support at 20870.

[Caseynotes]

UK retail sales at 9:30 and US durable goods at 1:30. Strong bear day yesterday though only nikkei tested key support levels. 

Dow currently testing the underside of it's daily chart support level, dax doing the same and still within it's up channel. Ftse faces a day of political turmoil if reports prove correct, it seems that everyone wants to push May off the cliff but no one wants to be seen actually doing it, no one is expecting her to say 'I'm just going outside and I may be some time' 🙂

[Guest PandaFace]

I mean... what actually is going on there days? How can anyone trust what this man says anymore? Hardline stance at one end the week, totally reversed the next. 

Hes a danger to markets.

“Mr Trump said Huawei was “very dangerous, from a security standpoint”, but insisted that it was “possible that Huawei could be included as part of a trade deal”.” From the FT

”Donald Trump said that Huawei, the Chinese telecommunications network company, was “very dangerous” but could still be “included” in a trade deal with Beijing, as the US president announced a $16bn bailout package for farmers hit by escalating tariffs.”

Edited May 24, 2019 by PandaFace

[Caseynotes]

It's a game but the stakes are high, it needs to be a slow and drawn out application of pressure. The number of big tech companies both in the US and EU that are falling into line and severing links to Huawei are growing exponentially, they announce on twitter on a daily basis. It's easy to forget China is a totalitarian regime, the government controls everything. CEO's of large companies go missing never to be seen again, the founder of Huawei owns just 1.5% of the stock, no one's sure but Chinese politicians seem to own the lions share. And this is the company that is taking control of the worlds 5G networks.

Trump has been the only one willing to take the Chinese on.  

[Caseynotes]

[Caseynotes]

Early look at FX, Oil and Gold;

[Caseynotes]

As expected lite going today, some activity in the Dax but no drama following the EU elections.

[Caseynotes]

Still no sign of any drama following the bank holiday and EU elections.

7am Ger Consumer Senti, 3pm US Consumer Senti

All our indices look destined to continue to look for resistance after the recent test of support..

[Caseynotes]

US indices looking to test key support in the last hour of US market open.

S&P and Dow H4 charts;

[Caseynotes]

Meant to add in the post above that China today dropped a very broad hint (via unofficial sources) that they were considering banning sales of Rare Earths to the US in response to US increasing pressure on Huawei. There were also reports (rumours) that Huawei were thinking about an IPO in order to allay US fears of Chinese government interference in their operations.

[Caseynotes]

Testing support and the S&P tentatively feeling below the recent low of mid May, nothing on the calendar today so not much to drive price lower other than sentiment but US GDP tomorrow may affect direction. 

[Bell]

Well we got our break. The indices rose so fast after  Powell. I think it's a swift drop.

Are levels of support probably a 61% fib retrace of the move.

Say what you will Trump has  a set of **** and is the only one standing up to China.

European politicians should be joining him. .. though they would have to find theirs.

[Caseynotes]

18 hours ago, Caseynotes said:

Meant to add in the post above that China today dropped a very broad hint (via unofficial sources) that they were considering banning sales of Rare Earths to the US in response to US increasing pressure on Huawei. There were also reports (rumours) that Huawei were thinking about an IPO in order to allay US fears of Chinese government interference in their operations.

HumanProgress.org @HumanProgress

"The Chinese government is threatening to cease exports of "rare earths" to the United States. Should Americans be worried? Far from it. The last Chinese "rare earths" embargo was a total dud. Read about the increasing abundance of "rare earths" here:"

https://humanprogress.org/article.php?p=1268

[Caseynotes]

Interesting day, Dow managed to break key support but recovered to a degree near end of session, oil fell then recovered to near starting level and gold rose then fell back to near starting level. Gold and oil remain in consolidation and so do the major indices, there is no great catalysts for any great fall as yet, the trade war lumbers on but the US economy remains strong, so far, the US GDP figures tomorrow awaited with some intrepidation. 

[Caseynotes]

What will the day hold, dax, nikkei and ftse  looking to bounce up off the prior low, dow trying to get back up above the key support broken yesterday.

The H1 S&P below shows much as the others, a recheck of the pivot which is interesting, I normally expect continuation, today being the same as yesterday until it isn't and price just continuing to drift down but a return up to the pivot is worth noting. Anyway, whoever controls the pivot will attempt to move forward to R1 or S1 and the plan for day trades is to catch rides between levels.

[Caseynotes]

Ger, Swiss and French bank holiday today will affect dax spreads. US GDP at 1:30pm  3.1% expected ;

[Caseynotes]

Seeing as everything seems to be stalled waiting for it here is a closer look at the US GDP chart, note this is the annualized 'Prelim' q/q, last months 'Advance' GDP came in at 3.2%. (see FF notes below);

Data due out at 1:30.

[Bell]

Jeff Gundlach made an interesting statement saying that US debt was up 6% and GDP was 5% so US Growth was -1%.

Without the debt expansion economic expansion cannot move forward.

At some point the tap gets turned off.

We could hit it very soon.

Prior highs at moment do not seem to be ready to be taken out.

 

[Caseynotes]

The main story of the day was gold and oil, they started out gold down oil up looking good for indices turning risk on but both reversed leaving indices stalled. The strong risk off move on the daily candles (gold up, oil down) also broke through short term support and resistance levels, so not surprising dow was unable to lift through 25214. 

[Caseynotes]

The indices took another knock overnight on Trump reasserting his plan to steadily increase tariffs on China while China reiterated their stance to protect their sovereign right to thieve intellectual property and bar the foreign companies from China that they want to copy the business model of eg Amazon. 

The moves in the markets are very much sentiment driven as US GDP, PMIs and consumer spending are all good while inflation remains low, for now anyway.

 

[Caseynotes]

Dow tags the Feb 8th low support (24877 blue) before the US market open, Week and month end flows today could be interesting.

[Bell]

We may get a small bounce to around 25200 on the chart but I would be looking at 24500 then 23500.

If those do not hold we double bottom.

Stochs are way oversold but I do not believe that means a lot other than people are skittish.

On the options and commodities floor in the old days guys would ride in at the overbought and oversold levels.

They were doubling up on momentum. 

We could be in a fade the rally mode. Summer and earnings season could be hard for stocks.

I am not a perma bear for my portfolio I would like it to let up.

Also Italy looks rocky again and Deutsche Bank they cannot give the stock away.

When the German Government unite the two largest banks in Germany you know they are exposed to some pretty horrible loans. They are making new lows daily.  Dax below 50 dma lower to go.

Does this remind us of a particular time. I hope I am wrong.

[WallStFoxy]

Hi @Bell

I Felt sure 11800 was the floor on the dax now I look stupid, this is not good for bulls. Sure I was selling the highs like a bear but I was following the correction at 11800 I turned Bull, more fool me!!!

Now we have to get back above 11800 to even think about a long.