Indices

[Caseynotes]

Savage 1 hour bear bar on US market close in the Dow, others following suit. Coming on the back of a steady grind upward the last hour of the US session and month end slaps price back to close to the US opening level. 

[Mercury]

It's always like this on a trend reversal, you have to have the retrace to "prime the pump" for the main move.  As mentioned earlier, I think a retrace back to retest key support/breakout area is what we will see before either a break back through support or a strong rally away.

[Caseynotes]

I prefer to see what the bars are telling me, that was a hard grind up and a sudden dump. Should have been a strong and steady move higher and a weak retrace, not a complete negation of the whole day's move. Also interesting was how Dow was unable to drag Ftse and Dax with it, that was unusual. Fortunately I don't need to worry about the bigger picture and tomorrow is another day.

[Caseynotes]

Frustrating day for the Dax yesterday, has retested recent resistance overnight and currently testing recent support. Dow in a similar situation.

Looking at either a break below 11400 or a retest of 11500 in Dax.

[Caseynotes]

Interesting S&P data on returns in subsequent months following a negative one (-6% or more).

[Caseynotes]

In case you were wondering what's going on - Trump tweeting on China;

[Mercury]

Don't buy that sorry! If that is all it took to move the market then the whole thing is totally @&*%$)

[Caseynotes]

Ha, the reaction was within seconds. Trump's twitter account is watched intently for any hint or clue, it's his main form of communications as he rarely does interviews or press conferences. The Dow regularly flutters on a Trump tweet and this one was on the most important topic of all.

Trump is the main cause of this downturn, he is using a period of US economic strength to realign trade relations with China, he could end the dispute anytime he wanted but clearly feels he's in a position of strength and is happy waiting for China to make the move.

[Caseynotes]

Interesting to note on these 4 charts that Ftse is preferring to align with Dax rather than Dow during this brief  period of divergence. Dow buoyed by the Trump tweet that came in around 30 min after the US open (1:30 gmt this week not the usual 2:30) and continued higher while ftse and dax lingered near support. 

 

[Mercury]

Well notwithstanding Twitter utterances (and maybe they are relevant for intra-day trading, I grant you that), it looks to me like the Dow (and other majors) rallied on up to a resistance level and then bounced back down.  As mentioned earlier, I think we will see a retrace ahead of tomorrows NFP and there are a couple of support zone candidates for a retrace move to complete.  Of note the rally up is in a classic 1-5 wave pattern, I am expecting an A-B-C retrace and turn at support to kick start a much longer rally phase.  To prime the pump for a significant rally we need to have a retrace now.  USDJPY is following a similar pattern, with a similar breakout point to be retested.

 

[Caseynotes]

No, the 'cause and effect' was blatantly obvious and had absolutely nothing to do with your lines on your chart.

 

[Mercury]

Are you suggesting the markets are taking no notice of my charts?  Surely not...  ?

[phillo]

On ‎31‎/‎10‎/‎2018 at 08:55, elle said:

Chart shows price now breaking above the 150EMA & moving up through the downward trend lines =positive. However, it is leaving an overnight gap, which I never, personally, like to see. I would have preferred a gap down & then a rally

 

[phillo]

[Caseynotes]

Another surge in the indices, this time caused by reports that Trump orders new trade deal papers between US and China to be drawn up for signing at the G20 meeting. https://www.bnnbloomberg.ca/trump-asks-cabinet-to-draft-possible-trade-deal-with-xi-1.1162200

 

[Mercury]

Interesting upper channel line @elle (the top dotted one).  I am still waiting for a retrace before this rally really gets going.  What is interesting is that a retrace to the breakout zone of my Triangle zone could also retrace to your channel line...  Depending on where this run tops out, that could also be setting up a Fib 50% hit, will be interesting to see how today progress with NFP data.  Whatever happens today I am minded to declare that the move up from the key support zones (across most stock indices) is a bullish move for the present.

 

 

[Caseynotes]

Well that NFP was a load of hoo haa. About 30 min before the release a Washington official was said to have claimed the reports of a trade deal being drawn up were false and Dow immediately tried to correct back down but then the strong jobs figure gave it pause for thought and it still hasn't decided which way to go yet.

[Caseynotes]

So just to see though to the end of day and a study of how price works. In my first post of the day is the story that drove price up, at 12 pm half an hour before NFP the story was denounced and so the driver of the price move was removed and as stated just above price needed to correct and headed back down, paused for a while to consider the good NFP figures then continued down, over corrected (see Dow) and then returned to the days starting point. Great fun.

[Caseynotes]

Start the week with the weekly charts, all the indices managed to put in a good bullish bar last week pulling back against the prior 4 weeks of downturn and may be now looking to move forward and retest highs. 

The prospective fly in the ointment this coming week are the US mid-term elections Tuesday, Republicans expected to hold the Senate but the lower House of Representative is in doubt. Any kind of major upset will throw the markets. 

 

[Mercury]

What kind of major upset will throw the markets and which way will it go as a result?

[Caseynotes]

The major upset is if Democrats take the 2 extra seats needed to take control of the Senate.

Voters on Tuesday will elect all 435 members to the US House of Representatives (the lower house), but only 34 members to the Senate, there are 100 Senate seats but only 34 are up for grabs this time round.

I'm suspecting GOP will retain both the upper house and the lower house. The Dems have wheeled out the 'big gun' Obama but he is filling high school gyms while Trump is filling stadiums. 

But you never can tell with elections, this is why the EU has disposed of them. 

 

[Caseynotes]

After being spoofed on Friday the markets are not reacting to president XI's statement last night that China will further cut import tariffs, that's well on the way to a new trade deal with the US. MSM doesn't seem to have picked up on that part of the speech, just that China sees the benefits of more open economy.

https://www.cnbc.com/2018/11/05/asia-markets-us-china-relations-currencies-oil-in-focus.html

[Caseynotes]

Oh ok, that surprised me, so lumbered into such a deep sleep by Dax today I failed to notice the others were being somewhat more interesting. Ftse yoyoing on Brexit deal news, Dow grinding higher with Nikkei trying to follow, US non manu had another excellent 60+ PMI today. The US economy continues to roar.

[Caseynotes]

Nikkei could be leading the way with a persistent grind upward during the apac session.

[Caseynotes]

Dax push down through yesterday's low and retesting the break at the mo.

 

[Caseynotes]

GBP up Ftse down on a hand gesture from MP. Ftse losing the support level it has hung onto all week.

https://www.bloomberg.com/news/articles/2018-11-06/pound-now-moves-on-a-simple-thumbs-up-amid-brexit-optimism?utm_campaign=socialflow-organic&utm_content=business&utm_medium=social&utm_source=twitter&cmpid=socialflow-twitter-business

[Caseynotes]

Dow tentatively nudges up to prior resistance on the US close to sit and watch the midterms. Nikkei could also break upward while Dax and Ftse have some ground to make up.

 

[phillo]

update of previous chart

[Caseynotes]

Dow pauses at the prior high, will be looking for continuation upward for Dow, Dax and Ftse now the main election news is out of the way. Dax targeting 11690.

[Caseynotes]

On the daily charts and with the elections out of the way and Trump with an increased majority in the senate (though losing the house) Dow happily striding out to challenge the all time highs.

Despite a strong start this morning Dax and Ftse failed at the first hurdle and now contemplating a second attempt.