Trading with point and figure

[Dentalfloss]

21840 pivot on dow
chart comin

 

[Dentalfloss]

dow

 

[Dentalfloss]

scalp off 12K
tight stop in

 

[Dentalfloss]

- Korea tensions ratcheting higher likely to overshadow macro schedule,
US CPI, Russia GDP, Mexico Production accompanied by Fed speak and IEA
Oil Market Report

- US CPI: lower than expected PPI likely to skew market expectations, but
read through from PPI not always good, perhaps especially this month

- Korea risk-off move: High Yield bonds once again leading the way for
equities?

- Charts: GasBuddy Gasoline Prices, Platts Jet Fuel Price Index, VIX
future net positioning, S&P500 vs US HY Bond ETF, JPM EMBI spread &
Fed rate hike probabilities

..........................................................................

********************
** EVENTS PREVIEW **
********************

US CPI is like to be the stand-out item on today's schedule, with Indian Industrial Production and Russian Q2 GDP the highlights for the EM space. Central bank wise there is RBA governor Lowe's semi-annual testimony, which was resolutely neutral and revived the threat of FX intervention, to digest ahead of some more Fed speak from the hawkish leaning Kaplan and ueber-dove Kashkari, while the IEA rounds off this week's round of monthly Oil Market Reports. Moody's will also be publishing its latest South Africa rating review, but given that this is a ratings date required by European law, and that fact that it has been just 2 months since the downgrade to Baa3, they will likely follow S&P and keep rating unchanged with negative outlook, with a strong chance that they may not even have conducted a review. The seemingly inexorable rise in Korean peninsula tensions will of course continue to cast a very long shadow, and the risk off flows evident now appear to be testing the resolve of those that have been relentless in buying every dip in equity and credit markets, and crushing any rise in volatility. As has been evident throughout this year in almost every asset class, market trends frequently become victims of their own positioning (take a look at the attached chart of the net short in the VIX future). As we have also noted on many occasions, the biggest bubble of the current era is in credit, and it will be when that bubble bursts that equities will be most vulnerable to a sustained correction. As was the case in the summer/autumn of 2015, a sell-off in high yield again appears to be leading the way lower for the S&P500, a chart of the US High Yield Bond ETF vs the S&P500 more than amply demonstrates. EM foreign currency bond spreads are also responding, but still remain only a stone's throw from their lows. One might well ask whether the super covenant lite Tesla 8NC3 junk bond that is being launched could well prove to be the straw that breaks the proverbial camel's back (some details on how covenant lite this issue is can be found here: http://www.marketwatch.com/story/mi...n-new-bonds-are-riskier-than-usual-2017-08-10 ).

** U.S.A. - July CPI **
- Following on from the weaker than expected headline and core PPI, a fall which was quite broad based, but led by the volatile Trade Services (-0.5% m/m) and Energy (-0.3% m/m), there will be many that see risks for today's CPI to the downside of expected 0.2% m/m gains on headline and core. In contrast to PPI, energy prices should be a positive contributor in so far as retail gasoline prices rose steadily through the month (see chart), and OER (housing) will as ever be a key upside contributor. The question then is whether some of the items that have dragged prices down in the past 4 months, such as prescription drugs and wireless services, show any signs of reversing (prescription drugs already bounced in June), with the very volatile airline fares component (which is included in core CPI, despite being essentially all energy) also very important, having posted falls of 2.7%, 2.7% and 0.6% in the preceding months (-5.9% q/q), and due a rebound in line with jet fuel prices (see chart). Still it is debatable whether an upside surprise will have a major sustained impact on market expectations for the Fed's rate trajectory, given the Korea factor, the more so perhaps given that Dudley's comments yesterday suggested that the transitory factors exercising downward pressure on inflation could take quite some time to unwind.


from Marc Ostwald

 

[Dentalfloss]

scalp off 12K
tight stop in

stopped out fro a few

 

[Dentalfloss]

21840 pivot on dow
chart comin

there now
lets see what happens

 

[Dentalfloss]

usdjpy
decent run from our 110.00 rez we marked yesterday
luvin it

 

[Dentalfloss]

last 24 hours
minor trend break
pivot at 11944-11948..not marked

gettin into pivot area

 

[Dentalfloss]

balancing row/most filled boxes is 11930 area

zip...there we are
for a few more
excellent

 

[Dentalfloss]

stops very tight now

 

[Dentalfloss]

ftse in 7300...should be a swing trade..ish there

 

[Dentalfloss]

dow,dax and ftse in our supp areas now
lets see what happens

 

[inzimam]

hmm. that was one hell of a move down to 11940 after the bounce...will it hold?

 

[Dentalfloss]

and bounce from our 11930 area

 

[Dentalfloss]

ditto dow and ftse ...for a few

 

[Dentalfloss]

hmm. that was one hell of a move down to 11940 after the bounce...will it hold?

we had it marked premarket...the balancing row is usually a magnet

 

[Dentalfloss]

11934 the low....we had 11930 marked
must improve....lol

 

[inzimam]

we had it marked premarket...the balancing row is usually a magnet

Not sure what a balancing row is, googled it but didn't get any obvious hits

 

[Dentalfloss]

row with most filled boxes

 

[Moneylender]