Trading with point and figure

feeble bounce...then it tanked again

5yuwb7.png
 
Ostwald, Marc
Attachments
08:29 (24 minutes ago)
to Marc

- Busier day for scheduled data and events, along with corporate earnings,
but US-mid-term elections the focal point; digesting UK BRC Sales, German
Orders and Japan Household Spending; looking ahead to Eurozone Services PMIs
and US JOLTS Job Openings; EcoFin meeting; UK and US to sell 10-yr

- German Orders: some light finally appearing at the end of the capital goods
tunnel after protracted downturn; a few more months recovery need to
confirm

- Japan Household Spending doubtless a function of array of natural disasters
rather than a trend indication

- Eurozone Services PMIs: Spain rebound defies weak signal from Germany flash
reading

- US mid-term elections: heavy turnout and high number of first time voters
suggest plenty of surprises; outcome very material to market economic
outlook

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

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

Once again a busy schedule awaits, though the primary point of focus will inevitably be on what patterns emerge tonight in the US mid-term elections. As previously noted, polls appear to suggest that the Democrats will take control of the US House of Representatives, while the Republicans are expected to hold onto the Senate, but with a lot of first time voters (not just youngsters, but also previously unregistered), whose intentions pollsters struggle to capture, surprises are more than possible, perhaps the more so given record numbers of postal votes for a mid-term election. The key battlegrounds which will likely offer a reasonably early signal about whether there is going to be a 'blue wave' (i.e. a swing to the Democrats), or not as the case may be, are seen in Kentucky's 6th district, Florida, North Carolina, New York's 22nd & 23rd Districts and all of the seats in suburban Philadelphia. A hefty 30 million postal votes have already been cast, and underlines that this year's mid-terms will be rather more material for financial markets, with a Democrat House win bringing deadlock, which would be better for the budget deficit, but likely to add to concerns that US GDP may slow sharply in 2019, as Trump's room for manoeuvre is hemmed in. By contrast if the Republicans win both houses, it will be construed as US growth positive, though that might well be tempered by fears that with the mid-terms behind him, Trump might well revert to a more combative stance with China, per se exacerbating global growth fears. But note that these observations about markets reaction in the immediate aftermath (1-2 weeks), thereafter incoming data will revert to being the guide on global growth prospects.

Ahead of that there are, in data terms, the Japan Household Spending, UK BRC Retail Sales and German Factory Orders to digest, while ahead lie the Euro area Services PMIs (flash reading fall expected to be confirmed) and US JOLTS Job Openings, with this evening bringing NZ quarterly labour data, just ahead of tomorrow's RBNZ meeting. Across the Tasman Sea, the RBA very, very unsurprisingly left rates at 1.50%, and signalled a steady policy outlook for the foreseeable future in its accompanying statement, though Friday's SOMP (Statement On Monetary Policy) which will flesh out what specific, if any, changes there are in its medium-term outlook. ECB, Riksbank and Norges Bank speakers are plentiful, as indeed are corporate earnings. On the auction front, the UK re-opens its current 10-yr benchmark, while the US continues this week's coupon refunding with $27 Bln of 10-yr, for which a fairly hefty concession has been carved out. The hither and thither on Brexit negotiations will of course continue, but an eye needs to be cast in the direction of the EcoFin meeting which among other things will discuss the EU's digital services tax, which has proved very divisive, with tensions between France (the main proponent) and Ireland and Sweden (the main opponents) particularly high. As a reminder, the legislative proposal if for a rather symbolic looking 3 pct tax on the European sales of companies with global annual revenues in excess of EUR 750 Mln. Prospects for the introduction on a pan-EU basis look to be poor, as this would require all member states to agree; however if a smaller group were to agree to imposing a tax, this would risk creating even bigger distortions within the EU (and likely some tax arbitrage by corporations), and would likely also still face major legal challenges, in so far as such a tax might also infringe on rules and treaty agreements on avoiding double taxation.

Of the overnight run of news, the better than expected German Orders data +0.3% m/m against a forecast -0.5%, Aug revised up to 2.5% m/m from 2.0%, with strength in domestic & Eurozone Orders, non-Eurozone falling 3.7%, but this followed an 11.4% m/m surge in August; above all paced by Capital Orders Goods which rose 1.4% m/m following August's +4.4%, which is still way down on end of 2017 levels, but showing clear sings of improvement after a long drought. The unexpected sharp drop in Japan's Household Spending at -1.6% y/y vs. a forecast of +1.5% is best dismissed as a function of the earthquake and other natural disasters, rather than signalling renewed weakness. As for UK BRC Retail Sales, these missed forecasts modestly at 0.1% y/y after falling 02.% in September, with the contrast between Food Sales at 2.3% in the 3-mth vs a year ago, and Non-Food at 0.1% underlines that food price inflation in the earlier part of the year, and still very lacklustre real wage growth and high levels of household debt continues to impinge on discretionary spending. Were Brexit uncertainties to ebb, there might be some relief, above all given a relatively tight labour market, though the greater impact in terms of growth dynamics should come via a boost to Business Investment. In passing, the impressive looking jump in the Russian Services PMI (56.9 vs. Sept 54.7) goes against the ostensible headwinds of ongoing sanctions (notwithstanding the relative strength of oil prices); however there is a strong seasonal pattern, and this year's pick-up is very much of the order of recent years.


from Marc Ostwald
 
thinking that we might get a move now to 25550 rez area
and a dump at the opne
could be wrong
take the signals
 
Before the Open (Nov 6)
by admin on November 6, 2018
in Before the Open

Share Your Thoughts

Good morning. Happy Tuesday. Happy Election Day.

The Asian/Pacific markets closed with a lean to the upside. Japan, Hong Kong, South Korea and Australia did well while Taiwan and Singapore were weak. Europe, Africa and the Middle East are currently mixed. The UAE, Russia and Greece are up; Turkey, South Africa, Spain, Belgium and Austria are down. Futures in the States point towards a down open for the cash market.

—————
List of Indexes and ETFs – here
—————

The dollar is down. Oil is down; copper is up. Gold and silver are up. Bonds are up.

It’s Election Day. News trumps the charts. The S&P can gap up or down 100 tomorrow. If you’re holding long term positions, fine. But having exposure to short term trades feels more like gambling than trading. Then there’s a FOMC meeting Thursday. Newbies should sit this out. There’s no reason to be aggressive when a sudden move in either direction can happen at any time.

from jason leavitt
 
You must log in or register to reply here.

Similar threads

Michael Carr
  • Article
Equities Technical Analysis Testing Point & Figure Patterns
Replies
0
Views
3K
T2W Bot
T2W Bot
S
Point&Figure
2
Replies
39
Views
7K
subarashi
S
M
Point and Figure
Replies
2
Views
1K
Dentalfloss
Dentalfloss
A
Point and Figure box size for commodities
Replies
4
Views
4K
TWI
TWI
William Rafter
  • Article
Technical Analysis Point & Figure Gone High Tech
Replies
18
Views
9K
GruntnoWay
G
Top