Indices

[Caseynotes]

The bulls went charging into the US close yesterday and have kept going since towing the others along but the ATH is just ahead for Dow so likely to be another pause. ECB rate decision today and is Draghi's last before handing over to Lagarde so may end up being a very non-committal presser at 1:30pm.

[Caseynotes]

Interesting diplomatic/trade stance from the Chinese;

SCOOP-Senior Chinese diplomat to FoxBusiness: China cannot be deterred in anti-poverty efforts, long-term growth strategy even amid trade talks; won’t make any compromise, even promising to eliminate IP theft that would stall growth more now.

[Caseynotes]

ECB goes further than expected, cuts rate and restarts bond buying, Trump responds >

 

[Caseynotes]

ECB summary;

[Guest phil]

• Marko Kolanovic, head quant at J.P. Morgan, says extreme divergences in the market have led to the move in value stocks and that trend should continue.
• The strategist also says there is an extreme divergence between small and large cap stocks, seen only other time during the tech bubble, in February, 1999.
• Given the rotation trade, Kolanovic expects more upside potential in small caps, cyclicals, value, and emerging market stocks than the broad S&P 500.
• In July, the strategist said the rotation into value stocks was setting up for a ‘once in a decade’ opportunity.

[Caseynotes]

Continuing to grind higher, Draghi surprised yesterday doing more than was expected though it was all 'open ended' meaning Lagarde can cancel at anytime but probably won't given her support for fiscal easing, thoughts turning to the FOMC meeting next Wednesday a 25bp cut 100% priced in and 50bp by end of year at around 50%, Powell probably won't go as far as Draghi but he is something of a loose canon with a monkey on his back so should be fun.

Daily charts;

[Caseynotes]

With the FOMC US interest rate setting meeting coming up on Wednesday may see Dow inch up towards the ATH and monthly chart resistance level (purple) in expectation with the others following with caution. Could be an interesting week with the US and Iran shouting accusations and threats at each other while the possibility of further drone attacks remains high.

Daily charts;

[Caseynotes]

Dow settling in just under the ATH, some speculation around that with the jump in oil the Fed may not be so keen to lower rates tomorrow and Putin offers to send weapons to Saudi as they don't have enough apparently.

https://www.cnbc.com/2019/09/16/fed-decision-expectations-rising-that-rate-cut-might-not-happen.html

[Caseynotes]

No real movement yesterday, attempted to go lower but was bought back up, attempted to break higher on the US close but sold back down overnight. Fed rate decision today 7pm and presser 7:30 so traders likely to be cautious til then

[Caseynotes]

So you have to admit this S&P chart is as bullish as you could get, traders have been waiting for the Fed who haven't disappointed, have refused to break lower during that wait and are just staring at that ATH just a short reach away. Barring a war there seems nothing to hold back the continued march onward and upward.

Daily chart; 

[Caseynotes]

Dow has just backed away slightly overnight having ramped up into the US close yesterday. UK interest rate not expected to change so it will be down to the vote count and the mon pol statement. Dax and ASX tracking Dow.

 

[Caseynotes]

Dow remains just below the ATH, some might be thinking there should have been more lift off the Fed mtg Wednesday but as I pointed out in the dax and dow thread Wed morning that if the event is front run to the tune of being 90 to 100% already priced in then the risk is to the downside rather than up.

Not much on the calendar today and is Friday so not expecting fireworks but will be interested to see if there is any downward pressure and how the bulls might cope, they have been in control for some time now.

[Caseynotes]

With the US indices back up near the highs it must be time for Trump to ratchet up the trade war again (4 times in a row so far).

 

Donald Trump’s ready to escalate US trade war if deal not agreed soon, says top White House adviser Michael Pillsbury

• Tariffs on Chinese goods ‘could go to 50 per cent or 100 per cent’, Michael Pillsbury says
• But the American leader is not pursuing ‘cold war 2.0’, and US-China decoupling would be a ‘consequence of no agreement’ by Beijing, he says

https://www.scmp.com/economy/china-economy/article/3028164/donald-trumps-adviser-china-michael-pillsbury-says-president

[Caseynotes]

Some excitement starting to stir on the increasing breadth of the US indices as measured by the advance decline indicator and as seen in the percentage of stocks over their 200 day MA (70% up from 50% in mid July).

A second major breadth thrust for 2019 (A/D 2.3x) is showing on the S&P (the first was in Jan) and may be the signal to another breakout.

The two flys sitting on the rim of the ointment are the FANGs which have been lagging lately and Trump who traditionally likes market tops to up the stakes in the trade war and send the markets back down again.

(Callum Thomas)

[Caseynotes]

Dow has found support again at 26890 after news the Chinese trade delegation returned home early from the US trip.

US GDP data later in the week expected at 2% q/q should draw the Dow back towards the highs with Dax, Ftse and ASX waiting expectantly for Dow to make a move. Lots of Fed speak this week and a FOMC press conference may give the markets a push but which direction. 

[Caseynotes]

Another test of support during the London session and recovery again after the US session open, S&P remains in a tight consolidation bull flag at the ATH.

Daily chart; 

[Caseynotes]

Indices remain stuck in this 8 day period of consolidation with Dow holding fast just under it's all time high, attempts to push lower are bought up but no real spur to push higher as yet. Ftse and Dax tuned to Dow while ASX pushes on and up.

[Caseynotes]

Dow extends range down following US severe criticism of China in the UN shows a trade deal is not even close. Not much on the calendar today.

Dow found support at 26714 and has bounced up 140 points should continue to look for resistance which is likely to be under the recent highs. 

[Caseynotes]

If the Brexit debacle wasn't entertainment enough there's laughs a plenty across the pond as well. The Dems have realised that unless they can impeach Trump they are sunk in the next election, right on queue comes a whistle blower with an (fake) account of a Trump phone call containing Trump 'lies'. "Impeach" - Trump releases the official transcript of the phone call, drat, but next time we'll get you. Clown world.

So that was the cause of the drop and rally yesterday, let's see what today brings.

Latest betting on the runners and riders below.

[Caseynotes]

Indices start the day trying to lift higher, the Dems getting desperate keeping the impeachment ball rolling now and have resorted to begging potential whistleblowers to come forward after the one they had was proved a fake. Laughably they didn't make any checks on the story at all before steaming in.

[dmedin]

UP!!!

DOWN!!!

I'm just going to shake mine all around

[Caseynotes]

Markets were fine until this afternoon with news the US were considering limiting exports of oil to China and that they were also thinking of limiting investment flows into China. Could be the start of a Trump war escalation and there may be a reaction from the Chinese over the weekend which would lead to the possibility of a market gap down on Monday.

M30 charts;

Edited September 27, 2019 by Caseynotes

[Caseynotes]

Not a lot on the calendar this week the biggy being US NFP on Friday. UK GDP today. China on holiday for the week starting Tuesday.

Dow still within this consolidation pattern since mid Sept and looking for an excuse to break either way with the others waiting to see.

Month and 3rd quarter end flows today.

Daily charts;

[phillo]

https://www.youtube.com/watch?v=_B_Af6iVTg4

[dmedin]

IG's very own portfolio manager, Oliver (very posh accent), says you shouldn't be a short-term speculator - stick to the long term.

 

[Caseynotes]

All moving up off support into recent resistance, short term bullish as the US indices heading back into the highs.

Daily charts. 

Also below is the S&P monthly chart plus a special offer for all those trying to make a career shorting the indices.

https://www.pcworld.com/article/3438723/train-to-become-a-certified-cisco-network-engineer-for-just-29-90-off.html

[Caseynotes]

Looked at the S&P monthly this morning but worth checking Dow, Dax, Ftse and ASX monthlies as they are all staring at their All Time Highs. Dow is the closest and it would not take too much to push on through and as the US is the world econ driver the rest are likely to follow, some headway in the China/US trade dispute would do it.

Monthly charts;

[Caseynotes]

All the indices took a hit on the very poor US manu PMI data yesterday with Dow breaking down through key support 26714. The move was so strong because the figure was way outside consensus even though manufacturing only accounts for 13% of US economic activity. Of more interest, especially after yesterday, will be Thursday's non-manu PMI expected to come in at 55.1 and don't forget Friday's NFP. The Fed will be watching and wondering if more rate cuts might be needed before the year is out.

Last yearly quarter of the decade folks, time to get a move on 🙂

Edited October 2, 2019 by Caseynotes

[Caseynotes]

Indices will be looking for support here at a prior low for Dow and Dax, the most important US PMI figure (non-manufacturing) comes out today at 3pm, expected to be 55.1. An actual figure way outside the expected can really move the market as seen following the disappointing manu PMI on Tuesday.

See below for more info on the Purchasing Managers Index which is a survey of expectations for the near future, 50 being neutral, above 50 is expectation of expansion and below 50 is expectation of contraction of business activity. PMIs are a leading indicator and the non-manu figure today is mostly services which are a main driver of US GDP.

 

[Caseynotes]

Bespoke

"2008 and 2009, 1934 and 1935 are the only other years to start Q4 with a 2-day drop of 2%+."

(see below)