Trading with point and figure

dentist007 said:
dax
a bit more detail
wide supp area starts at 11530...ish
rez starts at 11586 up to 11700..ish
confusion...lol.....good for us

28s0qv8.gif
Click to expand...

our 11530 supp area worked well today
 
COMMENT: As with the previous Beige Book, this paints a steady profile of overall activity, with some nuanced changes, most notably a slight pick-up in price pressures, mostly on the input side and from what have been very subdued levels, a trend which is expected to accelerate marginally going forward. Labour & skills shortages remain very evident and broad based, and while this is exercising some upward pressures on wages, the latter is also attributed to hikes in minimum wage levels. Manufacturing continues to recover from protracted weakness in the first half of 2016, aided and abetted by a still patchy recovery in the mining/resources sector. Retailers, as was very evident in the Dec and prior Retail Sales reports, continue to struggle with the crosswinds of the long-term shift from bricks and mortar to e-commerce, and thus expressed some disappointment about seasonal sales levels, though the attritional impact of Black Friday and Cyber Monday promotions may well account for much of this. The housing sector remains in rude health. Overall there was nothing in this report to signal a major shift in current economic dynamics / trends. As for Yellen's speech on the economy, markets appear to have overplayed her comments on the rate outlook, in so far as all she did was to recap the median view of the December 'dot plot', as per "Now, many of you would love to know exactly when the next rate increase is coming and how high rates will rise. The simple truth is, I can't tell you because it will depend on how the economy actually evolves over coming months. The economy is vast and vastly complex, and its path can take surprising twists and turns. What I can tell you is what we expect--along with a very large caveat that our interest rate expectations will change as our outlook for the economy changes. That said, as of last month, I and most of my colleagues--the other members of the Fed Board in Washington and the presidents of the 12 regional Federal Reserve Banks--were expecting to increase our federal funds rate target a few times a year until, by the end of 2019, it is close to our estimate of its longer-run neutral rate of 3 percent." There was no mention of discussing a reduction in the size of the Fed's balance sheet (which Kaplan and Kashkari also mentioned yesterday, the latter with some scepticism), but then again this is a topic, which was not really suited to her audience, the omission therefore should not be over-interpreted. The only question is whether she reprises yesterday's comments when she speaks at the Stanford Institute for Economic Policy Research today.
from Marc Ostwald
 
downtrend started last Friday...red trendline
problem is

fierce recoils into the trendline
as we saw yesterday with a tank down to our 19730 supp area we marked the day before
got a fierce recoil from that
 
a bit more detail...now you can see the problem
is t5he green a start of a new uptrend..??
or do we test supp/rez...?? and continue down

29uzgn8.gif
 
- Digesting Yellen speech, Oz Labour data and RICS House Prices ahead of
ECB meeting / press conference and PM May Davos speech; US Housing Starts,
Claims and Philly Fed survey, France, Spain & US auctions and further
rash of corporate earnings the highlights; EIA crude inventories also due

- ECB: Draghi likely to welcome growth and inflation pick-up, but stress
downside risks to growth, bemoan lack of Core CPI pick-up; repo market
problems may prompt some tweaks; awkward questions likely on dissent

- US Housing Starts: large rebound after November slide expected, Permits
set to underline sector remains in very good health

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

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

It is debatable whether the much under-anticipated ECB meeting will prove to be the highlight of the day, given that expectations are set so low. In statistical terms, the schedule is modest, featuring the overnight labour data from Australia (solid if unspectacular) and UK RICS House Price Balance, while the US has Housing Starts, the Philadelphia Fed manufacturing survey and weekly jobless claims. Rate decisions are also due in Malaysia and Indonesia, with policy seen on hold in both, however Chile's central bank is forecast to cut rates 25 bps to 3.25%, its first rate change since hiking rates by 25 bps in November 2015; with another speech by Yellen also due, where the prepared text could be very similar to yesterday's. British PM May's speech in Davos will be closely monitored, but will probably add nothing relative to Tuesday's in terms of fresh insights on the Brexit process. Another rash of corporate earnings features Amex, Bank of New York Mellon and IBM, while Spain and France top the govt bond auction schedule with multiple maturity sales, and the US re-opens the current 10-yr TIPS benchmark. Overall, as observed on Monday, financial continue to struggle to deal with the very large array of economic and political uncertainties that lie ahead, but are overall still priced / positioned for what can be termed positive outcomes. However this continues to be predicated on the 'There Is No Alternative' mantra of recent years, predicated on the ongoing financial repression of post-GFC central bank policies, and its accompanying low returns bed fellow, rather than on firmly held optimism. Liquidity continues to remain severely impaired both by regulation and the constrictions of financial repression; as such thin and rather choppier trading conditions are likely to continue, until some of the fog of uncertainties starts to lift.

** Eurozone - ECB Council meeting **
- The ECB is not expected to make any policy changes (unsurprisingly), but Draghi & Co will face some testing questions on the pick-up in inflation and the more vociferous dissent evident in the 'account' of the December policy meeting. But for the time being, the ECB will be keen to stick to the steady policy path that it signalled for 2017 at its December meeting, even if there are inevitably more questions about the chances of 'tapering', and perhaps some questions about whether Draghi is actually presenting an accurate 'account' of views on the ECB council. Draghi will doubtless continue to point to downside risks to growth forecasts, predicated on the array of political and economic uncertainties, despite the recent run of generally better growth indicators for most of the Eurozone, and will certainly ride roughshod over the uptick in headline inflation, and point to the ongoing lack of any meaningful upturn in core CPI. For all that short dated yields on core Eurozone debt have recovered from their end of year slide, they remain low, and there is a possibility that there may be some changes to address the scarcity of repo collateral.


** U.S.A. - Housing Starts, Jobless Claims, Philadelphia Fed Manufacturing **
- Housing Starts have been very volatile in recent even by their choppy standards, and this is expected to continue today, with a 9.0% m/m bounce to a SAAR pace of 1.19 mln expected after a very steep and unexpected 18.7% m/m decline in November; the less choppy Building Permits are seen posting a modest 1.1% m/m gain to a SAAR pace of 1.225 mln, which chimes well with a continued solid pace of sector activity, notwithstanding the slip in yesterday's NAHB Index (67 vs. 70), which remains at high levels by any historical standards. Jobless Claims are seen edging up to 252K, effectively stabilizing after the recent holiday related volatility. The Philadelphia Fed Manufacturing is seen slipping to a still solid 15.1, after surging to a 2-yr high of 19.7 in December, with some of the forward looking sub-indices seeing even greater strength (it should also be remembered the headline index is not a composite). While there are some voices in the US business community questioning whether the Trump election related boost to confidence is justified, it may be rather too early to see this in surveys, or indeed to interpret any survey index setbacks as suggesting that idea is getting some traction. This is all the more so the case in the Philly Fed region, in which resource sector refiners are heavily over-represented.
from Marc Ostwald
 
Morning all,

Ftse sp 7220ish rez 7266 - unspectacular. The gyrations of cable (in a fairly narrow range for now 1.225 - 1.233) are mirrored in ftse for now it seems. WTI could push up 53 again but likely on dollar weakness rather than events for now. Bit like Brownian motion, round in circles.

Opportunities for counter trades.... but I rather like to get the ducks lined up for a pop either way.

I still see cable edging down 1.22 and oil to 53 = ftse up...but lacking the alignment atm with pesky USD doing it own thing and US markets taking a breather.
 
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