Trading with point and figure

Dow

29orix1.png
 
Dow
difficult to tell if its a top
could be a pullback

it is massively overbought...big deviation from trendline

that is all we know...lol
crazy stuff
 
Morning all,

Didn't get anything out of the EURGBP p/b yesterday.

.8875/80 seems a good place for a bit of a bounce so now long again at .8884
 
- Digesting China Trade and UK Q3 BCC survey, awaiting US CPI and Retail
Sales, deluge of central bank speakers at IMF/World Bank meetings,
Trump speech on Iran and another bevvy of US Q3 financial earnings

- China Trade: broad based strength in imports underlines strength of
domestic, even if special factors exacerbated size of gains; exports
none too shabby either

- US CPI: Gasoline and Food to bump headline up sharply, core seen more
restrained, but some risks from air fares and usual 'stickier' items

- US Retail Sales: Auto Sales and Gasoline to give big boost to headline
and ex-autos measure; core measures seen bouncing from August dip

- Charts: USD Dollar Index vs. USD/CNY; China Oil and Gas Imports; LME
Nickel vs. Iron Ore Future; WTI Oil future

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

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

So to end another underwhelming week in financial markets, there is high level data via way of the overnight much better than expected China Trade Balance, a rather sluggish UK Q3 BCC survey, and this afternoon's US CPI and Retail Sales, which are accompanied by provisional Michigan Sentiment, while the IMF/World bank meeting provide a platform for a deluge of ECB, Fed and other central bank speakers. Politics will also continue to cast a longer shadow, above all in the UK with the talk of 'deadlock' in Brexit negotiations, and of course in the US, with Trump set to make a speech on the US' stance on the Iran Nuclear Treaty late this afternoon, having also signed an executive that puts a large spoke in 'Obamacare', while the US also appears to be playing very hard ball in NAFTA negotiations. Otherwise the Q3 corporate earnings season continues, with financials continuing to dominate. In terms of the run of central bank speakers, it will be interesting to see whether today's ECB speakers (including a number of hawks) show signs of lining up behind Praet and Draghi on the proposal to probably halve the monthly pace of QE, but extend it for at least 9 months.

** China - September Trade Balance **
- The September Trade data painted an overall much stronger picture of domestic demand than many had been anticipating, and effectively made clear that the weaker August readings did not signal impending weakness. That said, some of the boost to imports was probably attributable to some front-loading of imports ahead of last week's National Day/Autumn Festival holiday, with more working days this September probably also giving a boost. But the strength of commodity import growth (18.7% y/y) was across the spectrum, underlining the strength of domestic demand, and as much as Exports missed forecasts at 8.1% y/y, this was still a notable acceleration from August's 5.1%. Some of the import strength owes something to special factors, for example the rise in Coal Imports was due to cuts in domestic output and related to stockpiling for winter heating demand (also a factor in Nat Gas Import strength). The rise in Iron Ore Imports was also in part prompted by domestic quality control restrictions, thus prompting higher imports of higher grade ores from Australia and Brazil. Be that as it may, as markets look to next week's key Community Party Congress, the Chinese economy looks to be in good health, even if the process of rebalancing the economy is ongoing, and sectors with overcapacity will continue to need to be restructured.

** U.S.A. - September CPI / Retail Sales **
- Yesterday's PPI was broadly in line with forecasts, with the higher core PPI boosted by Trade Services, which was no surprise, but has little bearing on today's CPI. The consensus looks for a more substantial boost from energy (above all) and food prices relative to PPI, with a 0.6% m/m implying a sharp rebound to 2.3% y/y from August's 1.9% y/y. There will be many in financial markets that dismiss such an outturn as hurricane induced statistical noise (above all food and energy), particularly if forecasts for a more modest, and historically typical 0.2% m/m core CPI, which would imply marginal uptick in y/y terms to 1.8% (vs. Aug 1.7%). The wild cards are both the standard risks from housing costs, and stickier items such as pharma and health care, as well as auto prices; the latter in so far as the huge boost to Auto Sales (18.47 Mln SAAR vs. August 16.03 Mln) was hurricane induced replacements, the question being whether auto makers and sellers viewed that expected boost as an opportunity to offload a well-documented inventory overhang, or to reduce incentives and discounts to boost pressured margins. Retail Sales will effectively be under the same influences, and this reasonably well discounted in median forecasts, which look for a mighty 1.6% m/m jump in headline, 0.9% ex-Autos, but more modest ex-Autos & Gasoline and 'Control Group' rises of 0.4% m/m. Revisions will require a degree of scrutiny in respect of the latter core measure, after August's -0.1% and -0.2% m/m respectively. Market reaction will more than likely be primarily contingent on core measures in both sets of data.


from Marc Ostwald
 
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