Trading with point and figure

11200 and 19650 hit, would normally expect to see some selling here, but, is this a normal market?
 
DAX into the open

2u8jj2p.jpg
 
dax
seems to be decent inputs
3 trendlines drawn from reaction areas and not from minor pullbacks
a big wodge of supp marked
those trendlines could be decent pivots
not a screamin short...scalps only
 
11070-11100 seems to be a decent supp..then 11K
otherwise we consolidate and maybe fake higher
 
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ftse...we had 6956 area as rez yesterday
dax 11180-11240 area
think spx at 2250 area should be rez
19650 area on dow
lets see what happens
 
pivot area at 6888 from yesterday
6850-6888 big supp area
first supp 6916-6923 area
then 6900/round
 
- Digesting China inflation, Japan BSI survey, German Trade and labour costs,
awaiting UK Trade, Construction Output and BoE Inflation Expectations
ahead of US Michigan Sentiment; ECB speakers and weekend OPEC/non-OPEC
meeting as next week's FOMC meeting looms in the headlights

- China inflation: broader pressures evident in PPI, Food continues to
drive CPI higher; little wonder PBOC leaning against further CNY weakness
vs USD

- German Trade data somewhat disappointing, Labour Cost jump echoes
pick-up in real wages; Bundesbank upward revisions to GDP forecasts
confirm underlying strength of domestic demand

- US Michigan Sentiment: further modest gain expected after sharp November
rebound, seemingly underlining post-election optimism

- Charts: Bond Markets at Glance; US and German 2/30 yr yield spreads; WTI

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

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

As markets digest the ECB's tapered QE extension, and zeroes in on this weekend's OPEC/Non-OPEC meeting and next week's FOMC meeting and busy run of US economic data, there are a number of key data points on today's schedule as well as a number of ECB speakers. The stronger than expected rises in China CPI and PPI and an unsurprisingly disappointing CapEx component in the Q4 Japan Business Sentiment are accompanied by German and UK trade, the ever erratic UK Construction Output and the latest BoE Inflation Expectations reading, while the afternoon brings provisional US Michigan Sentiment and Wholesale Inventories. German Trade data were distinctly mixed with Exports missing forecasts at 0.5% m/m vs. expected 0.9% and a downwardly revised 1.0% m/m fall for September, while Imports were broadly in line with forecasts at 1.3% given a small downward revision to September. Perhaps more notable was a relatively sharp upward shift in Q3 Labour Costs to 0.8% q/q 2.5% y/y vs. Q2's 0.2% q/q 1.9%, which fits with the pick-up in real wages that has been evident all year, and which continues to pace a solid pace of personal consumption. Little wonder then that the Bundesbank has revised up it GDP forecasts for 2016 and 2017 to 1.8% y/y from 1.7% and 1.4% respectively this morning. The sharp steepening in G7 yield curves not only this week, but also over the past 3 months can be seen in the attached Markets at a Glance table, as well as the Bund and US 2/30 yr spread charts, and the US version underlines that there appears to be plenty of scope for it to steepen further, especially if inflation continues to tick higher, as seems likely. This then leaves the question of how long credit markets of all ilks can continue to remain at historically very tight levels, in no small part predicated by larger fund managers being unwilling to test the non-existent secondary market liquidity, and seemingly preferring to sell/go underweight govt bonds - this is not a strategy that is sustainable.

The China inflation readings underscore a couple of important points, above all that the efforts to curb outflows are as much about leaning against currency related inflation pressures, particular given that PPI showed that the emergent pressures are gaining in breadth, while CPI saw further gains in socially sensitive Food prices. The data put to bed any idea that the PBOC might look to cut rates further, but given the need to maintain an accommodative policy stance to facilitate the balance sheet consolidation in sectors with over-capacity it will continue to look to macro-prudential diktat type policy measures to curb the excesses in the property sector. Michigan Sentiment will be closely watched to see if the seemingly 'euphoric' improvement in consumer confidence following Mr Trump's election still has traction, with a further more modest rise to 94.5 seen after the 6.6 rise in November to 93.8, with December generally seeing a seasonal gain in any case.

from Marc Ostwald
 
FTSE very choppy today. Being pulled by cable up vs oil up nothing dramatic either way. If cable sustains upmove can see ftse dropping 6900. Cable to pullback and oil up then 7000 imho.

Been making better progress with cable trades recently than ftse tbh! small size and wide stops on cable for longer term plays as it seems to bounces off technical levels between 1.25 and 1.27 rather well recently.
 
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