Battle 2741

Posted: February 12, 2019 in Uncategorized

As wrote the 5th February, the battle rages on. There has been an attempt the 5th and 6th February, but it has been defeated.

Now until we stay above 2680/2990 it is a continuation of this battle.

A lot verges in the President Trump/President Xi communications and what the media say about it.

My personal opinion (not analysis) is that they will talk on the phone and then meet in March (there is too much to organize between now and end of month as there is also the meeting President trump/President Kim (South Korea).

In that case the sanctions will not be increased March 1st and the market would be happy and it would move the battle to 1780/1820.

Consolidation is at 2,650.

The support is at 2,600.

We are still in a Bear Market Rally scenario – but often with the negativity in the media and in the financial institutions the market likes to defy expectation. It could be even prepping in a buy the noise sell the news situation (graphically consistent with a top of this move in late April/early May).

The Royal Banking Commission just told us the truth: The banks running a monopolistic empire on Australia.

In one hit they succeeded to go away unscathed and destroy the competition of the mortgage brokers..

Oh yes…they will not be able to charge dead people.

Bank Answer to Royal Commission

CBA +5.06%

NAB +4.97%

ANZ +7.18%

WBC +8.2%

Translation F……off

Stock market: battle 2741

Posted: February 5, 2019 in Uncategorized

As my clients knows the pivot battle of this counter rally is 2,741 (SP500- MDA 200).

This is critical for the market as at this stage is a Bull Trap market with a top extension to 2,810 before rolling over again with target 2,350/2,200.

Time will see if favourable outcome just make it range bound 2,800/2,600, but ta the moment that is what the chart say.

Markets: A pivotal point

Posted: January 9, 2019 in Uncategorized

We are at a pivotal moment for the market.

SP500 and NASDAQ nailed an IMPORTANT resistance (2,581 and 6,903) as an intraday and this is the first well balance effort to return to the Bull market since October. This matches resistance/support of May and February 2018.
IF it clears and specially SP above 2,600 it will be BULL again.
But we need to get clear these hurdle to be sure (there are 65% chances it will do so. It is a textbook bull case 20:1 positive days since 26 January and also bad news are not so bad anymore (eg samsung disappointment lost only -1.68%…if it was December it would have lost 10%).

Nasdaq rally attempt has even a better internals than SP.

Market:the reign of the machines

Posted: December 28, 2018 in Uncategorized

If you wonder why the markets now normally swings 500 points +, I have an answer.

In this holiday period 85 to 90% of trading is done by machines robo advice and automatic rebalancing.

I was thinking about cancer as usually is treated with chemotherapy that technically kills the patient to save him/her from cancer.

The Fed embarked in this interest rate rising exercise even without any spike of inflation (the main mandate of the Fed is to prevent inflation becoming a problem) and decreasing aggressively Quantitative Easing (from October (ops- the start of the crisis) USD50 billion per month).


Most probably as, after QE, they are without ammunition in case of crisis (cannot lower interest rates from zero, cannot stimulate a balance sheet when they have it already overblown it). But in doing so I think they are creating the crisis itself.

This is compounded by machine trading (Treasury Secretary Mnuchin agrees) that flood the market with orders when there is no liquidity (due to the Fed liquidity withdrawal). 500 points swings of the DJ are NOT normal.

I don’t think that the FED has to act to the vagaries of the share market (it is not its mandate), but a lot of indicators point to a relaxing of the pace of US growth (even EPS forecast decreased from beyond 20% to around 10% and a lot of indicators point down since November).

Even without much data point, one knows that most of the spike in data in early 2018 was due to the tax cut …and now is an headwind.

So, they should stick to their business – act only if inflation is running away.

Unfortunately the FED has a tradition of keeping on hiking until something cracks. Operation successful, patient (bull market), dead.

Hopefully tonight they will surprise me (FOMC release).

2019: The Chinese moment of truth

Posted: December 17, 2018 in Uncategorized

China in 2019 faces the real moment of truth.

Various indicators shows that China economy is really slowing down:

GDP slowed to 6.5% and probably will slow at towards 6%

Industrial Production, retail sales down, bankruptcies up. 

Unemployment and fixed asset investment stable. Bankruptcies up.

Even more scarily, the Nikkei reported that China is suspending the release of some economic statistics, provoking suspicion. According to the report, the Guandong PMI was not published on its 1-Nov scheduled date. Analysts speculated that it was because Guandong is highly geared towards exports to Europe and the US and the index recently fell below the neutral 50 level. China also stopped disclosing data regarding the exports and imports of crude oil, cars and other major items by country and region since the data for April, making it difficult to make a detailed analysis of the kinds of products China imports from and exports to the US.

And this is in an highly controlled, fake data country. 

Since long time ago (early 2013) my opinion is that it was not so sure China would take over the US.

The only Asian country that successfully escaped what the economist define as the middle income trap* are Japan, South Korea, Singapore, Hong Kong, Taiwan.

All of them as something that China cannot have. Democracy.

Democracy helps to innovate without fear of consequences. China, under President Xi, went actually backwards. Everything is controlled and manipulated and actually kills innovation.

On top of this there is the usual Chinese issues: ageing population, debt level, corruption, environmental issues and simply “the size of everything Chinese – land and population) and the living differential city/country.

President Xi flouted the Deng strategy of lying low (even got rebuked in October 2018 by Deng’s son said to “keep a sober mind” at the 2018 Politburo Congress. A veiled rebuke against going in a tariff war with the USA.

The direction of President Xi of an authoritarian state could prove too much even for China to overcome.