Trading with point and figure

dax
LOOKIN REASONABLY BULLISH
wants to pop to 10700

axl7ae.gif
 
looks like we could get 10680 and maybe 10700 quickly
who knows...lol
poss buy dips..especially if we test 10570 area
10640 area first rez..then 10680 and 10700......
just an opinion
 
** EVENTS PREVIEW **
********************

It will be a very subdued end to the week in terms of scheduled data and events, which probably suits holiday thinned markets, with next week's schedule also looking rather meagre (flash PMIs, revised GDP, US Durables, Japan inflation, Jackson Hole). For today, Dallas Fed's Kaplan's overnight comments, an expected 25 bps rate cut in Indonesia, the latest UK PSNB budget readings are accompanied by Canadian CPI and Retail Sales, none of which appear likely to set the world of financial markets on fire. In terms of the UK PSNB data, a surplus of £2.2 Bln is anticipated (or £1.9 Bln excluding banks), which is seasonally typical due to corporate tax receipts, though also better than last year's £1.66 Bln surplus, and by extension sustaining the improvement seen in the better than expected June (£7.805 Bln deficit, FY to date -8.3% ex-banks). Of specific interest in the detail will be whether the somewhat anomalous April-June 5.4% y/y rise in Income Tax/NI is sustained; anomalous in so far as this is so much higher than Average Weekly Earnings. VAT receipts should also see something of a boost from the strength of Retail Sales. It is also monthly options expiry in equity markets, though it is the increasingly sharp rally in oil prices that will likely be more of a discussion point. While the dubious hullabaloo over a potential production 'freeze' would appear to be driver, the inventories appears to have given the rally some extra momentum, in no small part due to the Aug options expiry, and a relatively 'furious' bout of delta hedging. As noted the other day in respect of the comments by former OPEC secretary general Khelil suggesting that a production deal of some description was a rather more 'real' prospect, if oil prices were to establish themselves at $50 or above for any sustained period, headline CPI in most G7 countries will get close to 2.0% by the end of Q4, which should force a rethink for most central banks, even perhaps the hapless BoE. It is also worth taking note of shift in the tone of both Fed's Dudley and Williams comments yesterday relative to Monday, with the former at pains to talk up the US economy (above all growth, employment and wages), while Williams was keen to stress a degree of urgency in making the next rate move. Markets will of course remain highly sceptical given the Fed's record over the past 15 months, but such changes in rhetoric are nevertheless worth noting, and put an even greater focus on Yellen's speech at Jackson Hole next week ("The Federal Reserve's Monetary Policy Toolkit" at 15:00 BST on 26 August).
fro Marc Ostwald
 
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