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Interesting short video from Chris Weston (formally of IG Australia) on the week ahead.

 

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As was going to be in the APAC report the markets are reluctant to move too much immediately before the FOMC rate decision and report tomorrow, Dow content to mosey on up to the fence and just peek over to the other side as is Dax and Nikkei. Ftse has made a break for it and will be interesting to see if it can make that stick today.

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Dax pushing up to 11719 again, note this is a big support level turned resistance from 1 year ago. A break upward could start a larger move. Ger Econ Sentiment data out at 10 am.

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Interesting day yesterday with an unexpected shoot for the top and fall back. Getting in on a high immediately before FOMC would have been ambitious and the market seems to have thought better of it.

FOMC at the changed time of 6:00 pm today with the presser at 6:30.

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Something seems to be stirring in Downing street, May wanted an extension to June 30th,

EU says May's letter arrives too late and rumoured to demand extension must be to Dec,

May calls a cabinet meeting today which lasts just minutes before they are all back out on the street with long faces (according to Guy Lambert BBC).

Rumours that May will make a statement at some time soon today.

Breaking news that Tusk to make a statement on Brexit at 1600 GMT

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Good read in the APAC brief on the double edged sword of the FOMC meet yesterday causing an initial jump higher in indices on reduced expectation of rate rises then reflection and price recall with future growth not so certain and a reduction in general risk appetite. Gold took off and hasn't looked back. Same for USD except in the opposite direction.

Dow is currently looking to retest support at 25658 and same for Dax which is heading down towards 11569.

Ftse with it's Brexit concerns coiling down mid range and Nikkei heading to close around support at 21422.

H1 charts;

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Dax trying to punch down through 11500, if the drop continues next level down is 11472 then not much in the way down to 11400.

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Strong bull day for Dow and Ftse yesterday, Dax still struggling to keep up, Ger PMIs today at 8:30, manu expected at 48 (47.6 last month, less than 50 is contraction) Ger services PMI expected 54.8.

French PMIs at 8:15 an EU PMIs at 9:00.  US PMIs at 1:45.

On the Dax H1 yesterday's low 11464  or  H1 resistance at 11601 are the initial targets.

Ftse sitting mid way between H4 support at 7292 and H4 resistance at 7370.

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Ger manu PMI 44.7 actual vs 48 expected Dax falls back after capturing 11601.

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Dax dropped down to 11464 (Blue), now trying to bounce back.

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Weekly charts and an interesting Friday. Red weekly bars all round, it was all going good til Friday though Dax started heading down on Thursday with very poor PMIs, Then on Friday US PMIs were down on expectations though still in positive territory, then mid-day the treasury yield curve inversion breaking news and the selling continued as longs built up over the week were exited before the weekend. Ftse gave up all Mon-Thurs gains plus some as did the others. More interesting news that came out after the US close was that there would be no further indictments from the Mueller inquiry which is finally wrapping up, so no chance of a Trump impeachment on that score. That may make an impression when markets open and provide a boost, but if the fall continues the level to keep an eye on is the Dow support at 25214.

Included is the S&P daily, worth keeping an eye on this as well to see if it can turn the 2812.85 resistance level recently broken into support.

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In the post above I wrote how the news of the inverted yield curve broke mid day Friday and may have contributed to the continuation down for the indices Friday afternoon, but before you all pile in short Monday morning there are a few important points to consider.

While it's true that the inverted yield curve (10y/1y) often precedes a recession, in the last recession of 2007 it preceded it by nearly a full 2 years. As an indicator that might be stretching it a bit. In fact the average lead time of the 9 recessions since the 1950's is 14 months, so you might want to take your finger off the sell button just for the moment.

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Pic 2 is also interesting and shows a following recession is not a dead cert and also that currently the inversion has only just touched into negative territory. And in pic 3 we see that the more widely used 10y/2y has not inverted at all (yet?). 

Like all indicators it's indicating possibilities, something to be aware of, until there's price action confirmation I would keep the finger off the trigger.

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Weekend Dow gets an early boost from the just released official summary of the Mueller report (also mentioned in the Sat morning post above). Trump (and all connected to him) no evidence of any Russian collusion or obstruction of justice.

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A small gap up on the Dow but quickly cancelled by an Asia inspired continuation down. Dow resting on 25373 with the above mentioned important weekly support level not far below at 25214 while there is prior support turned possible resistance above at 25503. 

Dax in a similar position resting on 11284 but below that is a long drop down to the weekly support at 10861, above is prior support turned possible resistance at 11404.

Ftse has dropped down into clear space with support at 7080 and resistance above at 7262.

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Posted (edited)
On 25/01/2019 at 10:19, Kodiak said:

DAX daily

Lot of resistance around 11 700 ish

 

 

DAX 250119.png

 

DAX Weekly

The rally stopped at the old neckline

Lets see whats happens? if this rally since christmas is the real thing or just a bearmarket rally?

DAX W.png

Edited by Kodiak
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On 19/03/2019 at 08:49, Caseynotes said:

Dax pushing up to 11719 again, note this is a big support level turned resistance from 1 year ago. A break upward could start a larger move. Ger Econ Sentiment data out at 10 am.

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Yes @Kodiak, the first head and shoulders can be said to have played out though not quite making the full measured move while the inverse H&S broke the neckline last week but got stomped on by the bad Ger manu PMI on Thursday. Nothing much news wise except maybe brexit or US GDP data this Thursday to give it a push either way at the mo.

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Mid day Dax and the early down move stopped at 11267, the move up capped at 11390 then a pullback and now another attempt to move higher.

H1 chart;

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Dow, Dax and Ftse have halted the climb back up to make a base camp, Dow stalling around 25600 on it's climb up after Friday's fall, Dax tagged the 11404 mentioned in yesterday mornings post. Fste stopped at 7207. The London open should show direction from here.

Nikkei was doing well until an hour ago when it suffered a large gap down seemingly on the CPI data release dropping to 0.4% from 0.5%. 

US consumer sentiment today at 2 pm. 

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RE; the yield curve inversion, an interesting take on the US 10 y Treasury. Monthly charts.

Mike Valletutti, CTA @marketmodel

Textbook retest after textbook rejection at 200 MA Yield lows are in. $TNX $TBT

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S&P looking to go higher today after the long tailed doji bar yesterday, currently back at 2812.85.

Daily chart;

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Dow with a similar high volume reversal candle on the daily chart . Dax looking towards 11404 again.

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Indices continue the haul upward this morning. Dow heading towards 25795 with support at 25540.

Dax looking towards 11569 having just broken through resistance 11447.

Ftse in a similar position trying to break up through 7222 to head onto 7262.

Draghi is speaking at 8 am and the Brexit circus rumbles on, not much else on the calendar today.

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Interesting concept @elle, using the ETF BKLN as a leading indicator, worth investigating.

 

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The 8 am London open saw everyone pushed back though starting to gain some traction now on the climb back up to the highs of this morning.

H1 charts;

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US Final GDP q/q numbers today 12:30 could cause a stir, 2.4% expected.

Markets still not sure of direction and continue somewhat range bound. Heading up again early morning but will the London open reverse that as it did yesterday.

H1 and Dow daily charts;

 

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Tried to the upside on the London open today but didn't far any better. Dow and Dax reversing at recent prior high and now heading back to their start position.

Ftse making a bid for the weekly resistance level 7262 before falling back.

US GDP 12:30.

US open 1:30

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