Trading with point and figure

dax into the open

ffd7ac.gif
 
rez starts at 9700
goin up into 9715-9735 area..then u to 9765 and maybe 9800
vertical counts in both directions...this is good for us...no clear direction
a fumble market..lol
 
currently in our 9615 supp area /marked on chart
we either move down to 9570 ish or move up to 9645-9660 area
 
** EVENTS PREVIEW **
********************

As the US returns to the fray of financial markets, Services PMIs dominate the schedule, with little else of note outside of the overnight Australian Trade data. On the policy side of the equation, the as expected no change RBA rate decision was always going to be overshadowed by the gridlock election result. However it is the UK that remains front and central, with the first round of the Conservative party leadership election taking place, while the Bank of England publishes its semi-annual Financial Stability Report, which means another press conference with governor Carney. The BoE also holds its first post-Brexit Indexed Long-Term Repo operation, though drawing implications from the level of participation and total demand will be fraught with pitfalls - high participation and/or demand could signal a) a desire to take out some insurance against forward flow, (re-)financing risks, or b) the perception that it offers a relatively attractive longer-term refinancing opportunity, while low participation / demand may simply reflect the fact that these are weekly operations, and with so much uncertainty, it will take time to judge how overall flows are evolving. Elsewhere it is safe to observe that the ECB's statistics conference, at which Draghi and many others will be speaking, and a speech from NY Fed's Dudley would have been rather more eagerly anticipated, if there had been no Brexit earthquake. A busier week for government bond auctions grinds into gear, with the first UK Gilt since the week 6-10 June via way of £2.5 Bln of 1.50% 2021, while Austria sells a selection of 10-yr paper, and Germany holds a rare and tiny auction of EUR 500 Mln of 30-yr Inflation-Linked Bunds.

** China/ Europe - June Services PMIs **
- It may be a little harsh, but once the rebounding China Caixin Services PMI has been digested, there is likely to be little interest in the continental European readings barring any big surprises. The China Caixin Services PMI rebound echoes the acceleration in the official reading, and per se offers evidence that rebalancing continues. However the accompanying hints of further targeted policy easing underline that this does not dispel the acute need to tackle the legacy problems of the need for further painful consolidation in the industrial sector, with a particular focus on addressing the problem of stranded assets and the associated mountain of debt. This may all appear rather moot in the context of geo-political tensions, as China's state-run Global Times which opines that China should prepare itself for military confrontation in the South China Sea, ahead of the international court of arbitration ruling due on 12 July. Be that as it may, the UK reading will attract rather more attention, especially after the sharp drop in the generally quite well correlated Construction PMI. The consensus for what it is worth in the current environment looks for a partial reversal to 52.8, after May's modest bounce to 53.5 from a more than 3-yr low of 52.3 in April. However the latter also saw the New Business index at it lowest since late 2012, and the Employment index at a 33-month low. The risks are clearly to the downside of the forecast, though as with the Construction PMI, the vast majority of responses may have been submitted prior to the referendum. (Due to Monday's holiday, the Non-manufacturing ISM will be published tomorrow).

Last but not least, oil market developments require some attention, above all the question of whether the view that crude markets should be largely in balance by the end of 2016, ignores some unseasonal build-ups in oil products (exacerbated by China turning a net exporter of product in recent years), and a surprising and counter-seasonal trend fall in US gasoline consumption (see chart). That said, product consumption growth in the EM space (above all India) continues to be very strong.
from Marc Ostwald
 
XETRA Dax close was 9709. May want to pump to that area, but i'm pretty confident we'll see 9577 today.
 
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