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Our indices got a lift overnight seemingly off the back of news that Trump was extending the period for ongoing negotiations with China. Dow, Dax and Ftse are nudging up to short term resistance levels so will be looking for a break higher and push upward.

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Dow and Dax manage to push up through near term resistance, Ftse left behind snagged on the brexit vote today.

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Today is week, month and quarter end, so watch out for end flows. Also, UK onto British Summer Time Sunday and so back to the usual US market open and close time by the UK clock. 

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All 4 gapped up on Sunday open after a strong bull weekly bar and heading to test weekly resistance levels so should be a fun week and US NFP to cap it off on Friday.

Dow currently checking the prior high at 26113 with the monthly chart resistance level just above at 26241.

Dax spent last week daily checking support before inching higher, no strong resistance til 11824 but EU PMIs this week could cause problems.

Ftse will be looking to continue on towards weekly chart resistance at 7370.

 

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Posted (edited)

As mentioned in the EMEA brief  " S&P 500 gained 0.7% to 2,834.40 - posting its best performing quarter since 1998 as it rose 13.1% for the period."

Yet SSI for S&P is 69% short, as it has been for all of March (at least, see previous posts).

Overbought doesn't mean sell, it's actually a trend continuation signal, dropping out of overbought may indicate time to think about taking profits.

In the same way, heading into resistance does't mean sell, you should be cautious but levels are made to be broken and strong momentum gives price a fair chance of doing that.

Picking tops and bottoms is a specialist art, part time retail traders nearly always get it wrong and sitting waiting for major reversals in multi year bull runs is just plain daft.

It's not wise to buy directly into resistance but it's not wise to sell directly into it either. Retail traders like to rush in then when caught out sit on losing trades for as long as possible hoping it might turn round but finally exiting when they just can't stand the pain anymore.

Let price decide what it's going to do and then try to catch the ride to the next level of contention.

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Edited by Caseynotes
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Interesting COT data Friday. Dow increasing net long large speculator interest while S&P and Nasdaq, which had both flipped short have now both flipped back to being large speculator net long.

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Posted (edited)

For those who think Brexit is having an impact on the FTSE and FTSE Mid (more for the facts GBP devaluations can make an easy trade available on the arguably global FTSE index)

Short on time? Here's your quick Brexit summary:

Theresa May has suffered a substantial parliamentary defeat on a third attempt to pass her Brexit deal through parliament.

The prime minister had sought approval for her deal on the UK’s withdrawal from the EU on what had long been scheduled to be Brexit day.

MPs voted by 286 to 344 against the EU divorce treaty, which if passed would have opened the way to Britain leaving the EU on a revised date of May 22.

Speaking after the result, Mrs May said: “The implications of the House’s decision are grave.”

“The legal default now is that the United Kingdom is due to leave the European Union on 12 April. In just 14 days’ time.”

Amid speculation she could be forced to call a general election, she added: “I fear we are reaching the limits of this process in this House.”

In immediate response to the deal’s defeat, Donald Tusk, the president of the European Council of EU member states, called an emergency EU debate.

“In view of the rejection of the Withdrawal Agreement by the House of Commons, I have decided to call a European Council on 10 April. #Brexit,” he said on Twitter.

Britain is now due to leave the EU on April 12 without a deal unless Mrs May can persuade the 27 other EU leaders to grant a further extension in the Article 50 exit process. This would, however, require the UK to take part in European Parliament elections in May.

Got this from the FT's brexit roundup emails which I would recommend to all. Very good.

 

Edited by cryptotrader

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also inflation in America is very much under control, in fact too much. The Fed tries to keep the personal consumption expenditure (PCE) index at 2%. The Fed raised rates 9 times since December 2015 in anticipation of inflation rising. Falling core inflation may be seen as a sign of a weaker economy, but components can cyclically follow the business cycle (restaurant meals) or not (health care). The chart below shows not much has changed in either. Where is the cyclical inflation given America’s strong labour market?

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Are Community users aware of our 'Momentum Report' ? May be interesting for some...

"The S&P 500 index reversed back to gains to end the last week of Q1 2019 up 1.2%. This brings the quarterly gain to 13.1%, a record not seen since Q3 2009 and tails the 14.0% drop in Q4 2018. A quarter where investors both bought into the riskier equities and picked up the safer bonds had been characterized in part by the brief returns of a goldilocks situation. This is with inflation pausing, central bankers being supportive and the market looking towards hopes of US-China trade resolution to aid growth. The question going into Q2, however, is whether these gains can be sustained.

The inversion of the yield-curve from the previous week had been one capturing the market’s attention into the end of the month as growth concerns mounted. That said, warnings of over-reading into the distorted bond market warrants the need from us to be cautious and this is likewise for the reversion to normal for the 3-month/10-year yield spread last Friday. Watching the series of economic data in the fresh week as prices on the S&P 500 index remain adrift. In particular, Monday’s ISM manufacturing, retail sales and Friday’s labour market updates will be key to watch for. Amid the backdrop of growth worries, positive readings coming through would be ones to help. US-China trade talks also resume this week in Washington awaiting updates on this geopolitical influence for markets. "

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Yes, where is the inflation. Euro zone CPI 1.4% against the 1.5% expected (released today).

Powell was too eager to continue the rate rising, normalisation and forced to back pedal, I think the odds of an expected rate cut  this year are up over 40%.

Ger manu PMI was 44.1 against 44.7 expected (deepening contraction) released this morning.

US manu ISM expected 54, release this afternoon.

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That's quite brave @Turnip230248  trading straight into the US market open as you will usually get some bouncing around at first, tends to be better to allow things to settle a bit and wait for one side to take control. So your actual long entry was well judged with the bulls showing real intent with the 3 bar spike then hammering in on the pullback.

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Guest Dow open
2 hours ago, Caseynotes said:

That's quite brave @Turnip230248  trading straight into the US market open as you will usually get some bouncing around at first, tends to be better to allow things to settle a bit and wait for one side to take control. So your actual long entry was well judged with the bulls showing real intent with the 3 bar spike then hammering in on the pullback.

Yes -it is better to wait. I usually do so but jumped the gun this time. Usually better to wait for a "whippy" move to play out before getting in. In fact, it usually pays to mark in hi/low of "whip" and wait for price to trade out either side. - requires patience., but usually worth it.

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Very tentative easing forward, expecting continuation today, US durable goods at 1:30, US market open 2:30.

H4 charts and Dow daily.

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15 hours ago, Guest Dow open said:

Yes -it is better to wait. I usually do so but jumped the gun this time. Usually better to wait for a "whippy" move to play out before getting in. In fact, it usually pays to mark in hi/low of "whip" and wait for price to trade out either side. - requires patience., but usually worth it.

@Turnip230248, there is a good exercise to help with recognising when the rhythm of the market is too whippy and when it has calmed and moving in a more controlled manner. I've heard it mentioned a few times before but it came up again today to remind me.

On demo zoom in as close as you can go and enlarge the price scale so the current candle on a one hour chart takes up as much of the screen as possible, get a feel for how price pulses up and down on the current candle. Try to read it and anticipate, hitting the buy or sell and exiting over and over. It's a practice exercise on market movement and not a trading style so you use it to learn to gauge the current pace of rhythm of the market in order to help with trading on your actual time frame.

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Ftse breaks up above 7370, Dow awaiting US market open, Dax stalls at 11760 (R1 pivot), and will look to Dow for direction.

H1 charts;

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More SSI, this time from FXCM;  S&P 85% short, Dow 86% short.

Now yes of course price might just reverse here ...  but also it might not, how can 85-86% be so sure, it doesn't actually make any sense. They have all seen a red line and automatically presumed price is going to reverse on it. If I was smart money I know exactly what I'd do. 

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All the indices got a 1:00 am kick up on a FT report that the US/China trade talks have made real progress.

H1 charts plus the S&P daily this time which has surged ahead into clear space.

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Dax gets a boost from latest EU PMI data while Ftse takes a hit with lower than expected Services PMI.

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Dow and S&P setting up for a strong US market open at 2:30pm.

The API forerunner nfp today at 1:15pm 184K forecast. The US non-manu PMI at 3:00pm, 58.1 forecast.

Dow daily with monthly pivots thrown in for good measure.

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Posted (edited)

ADP nfp a miss at only 129k

 

 

Edited by Caseynotes

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Dax made the running yesterday while the others keep in touch with recent highs. After the good news on the trade talks the inevitable downer that one major sticking point was China's insistence that all tariffs be removed before signing.

Some initial sell off in Dax on the European open this morning but with all 4 posting green daily candles yesterday starting today anticipating continuation. 

H4 charts with S&P daily. 

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Was just comparing the SSI data from FXCM with the COT and the Dow daily chart.

Both the FXCM and COT confer that small speculators and retail (sameish) decided that the week starting  2nd of Jan was the time to go short on the Dow and have been flogging that horse ever since.

Large speculators were reducing there long exposure through Jan but started piling back in increasing long exposure again from the start of Feb, but not retail, oh no, they knew better. Gulp. 

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Dax really wants to push higher but being held back by Dow.

1 min Dax with 1 min Dow (Dow 100 ema only), once the Dow ema heads upward Dax should be away.

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Dax backs down after topping yesterday's high, Dow trying to rise after a slow start and special guest index AUS200 hovers around it's daily chart support level.

H1 charts;

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The indices got a boost overnight from China president Xi reporting the trade talks are going well (he does't usually comment). 

US NFP today 1:30 and the word on the street is it could be a big number after last months dismal 20k which was due to a freezing Feb. The mid-week ADP was 129k and the forecast for today is 172k.

Presenting a guest appearance in the charts today, the AUS 200. 

Daily charts and all, except the AUS, are itching to go higher.

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Guest DOW heading to 27600

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this has been amazing .....

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