Archive for the ‘Technical Analysis’ Category

Summer Solstice and the SPX

21 June 2017 Summer Solstice and the SPX

16th June 2016 IMO Full Version

Week Ending 16 June 2017

16th June 2017 IMO Free Sample

Week Ending 16 June 2017 Free Taster

2nd June 2017 IMO Free Sample

Week Ending 2 June 2017 Free Taster 1

Investment Markets Overview – W/E 26th May 2017

Spain……officially know as the Kingdom of Spain, is the second largest country by size and the 4th largest economy within the European Union. Its 46m population reside within 17 “autonomous regions,” including two archipelagos, the Balearic Islands and the Canary Islands, with Madrid being its capital city. Spain suffered badly following the financial crisis with unemployment rising to 27% as the property bubble burst, with the subsequent downturn witnessing a polarising society as has been the case elsewhere. Catalonia, by far the richest region in Spain and therefore an increasing source of Government revenue to prop-up the rest of the country, pushed for an “independence referendum” in 2011, just as the stock-market, the best “barometer” of Spain’s “collective social mood, was approaching its nadir. The demand was rebuffed by the government and has subsequently “waned” as stocks recovered with Spain out-performing the Euro-Area economic growth rate of late, following the tighter fiscal policies implemented in 2012 and with unemployment easing to about 17% now. However, a glance at the nation’s main stock-index, the IBEX 35, which remains some 30% below its 2007 all-time-high, notes it to be stalling once more. Our analysis suggests that the mood is about to darken and with it the Catalonia independence demand will return to centre-stage.

Confusion reigned in respect of crude oil this week, as the price was buffeted by the conflicting desires of OPEC and America. A timely “knowledge share” was posted on Wednesday, Critically Crude” which hopefully provides some guidance for you. For the rest of this week’s major economic and market news, with interesting charts and some geopolitical insights, please continue, with a reminder for non-subscribers of the limited-time offer “at your discretion”:

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US economic data included further evidence of a slow down in manufacturing, as the May PMI eased to 52.5 versus April’s 52.8, whilst the services sector inched higher, from 53.1 to 54. Consumer sentiment fell to 97.1 from 97.7, according to the final University of Michigan survey for May, but there was better news in respect of GDP, where the second reading for Q117 saw an improvement to 1.2% from the initial 0.7% reported, buoyed by personal consumption. On the housing front, prices eased to 0.6% in March versus February’s 0.8%, according to the FHFA, whilst April new home sales contracted by -11.4% as the more important existing home sales fell by a more modest -2.3%, It’s of interest to compare the average price of existing homes against the falling level of stock for sale, where the lower line shows the decline of inventories on a rolling annualised basis:

The Dow rose by 1.3% whilst the SPX and the NASDAQ were higher by a respective 1.4% and 2.1%.

Euro-Zone economic data was scarce this week but did include the provisional May PMI numbers, where manufacturing came in at 57 against April’s 56.7 as services eased to 56.2 from 56.4.

UK housing loans fell in April according to the British Bankers Association, whilst the estate agent consolidator, Rightmove, reported a pick-up in prices in May, rising by 3% annualised versus the 2.2% it stated for April. The public sector net borrowing was above forecasts for April but our focus this week is on the second reading of the Q117 GDP figures, revised lower to 0.2% and 2% annualised. In the main this was due to private consumption, which halved to 0.3% Q on Q against the initial 0.7% reported. A comparison of the two variables shows a close correlation and it doesn’t auger well:

The FTSE 100 gained 1% with the French CAC inching higher by 0.2% as the German DAX eased by 0.3%.

Out East, Japan’s trade surplus fell in April as exports grew by 7.5% annualised following March’s 12%, whilst imports grew by 15.1%, albeit a slight fall from the prior 15.8%. April department store sales rose by 0.7% year-on-year after the -0.9% contraction of March, whilst the April PPI services rate grew by 0.7% following March’s 0.8%.  CPI inflation was reported at the expected 0.4% for April, double the 0.2% reported for March, which will have please policy-makers, although it’s of interest to note that Abe’s preferred CPI ex fresh food & energy gauge (as it used to rise by more than CPI) is now under-performing, coming in at 0% annualised and remains a far cry from the Bank of Japan target rate of 2% annualised:

Elsewhere, annualised CPI in Hong-Kong jumped to 2% in April versus March’s 0.5% rate, whilst for Singapore it was 1.7% versus 1.2% as the Island state also reported Q117 GDP at 2.7% annualised following the 2.5% of Q416.

The Nikkei rose by 0.5%, whilst the Hang Seng added 1.8%.

The $US index rose by 0.3% to 97.4, with other risers including the $KIWI and the Yen, higher by 0.5% and 0.45%, whilst fallers included the British Pound and the Euro, lower by a respective 1% and 0.2%. Sovereign bond yields were in the main lower as Japan’s JGB 10-year yield was unchanged at 0.03%, the UK 10 year yield fell by 8bps, at 1.01% whilst the German yield fell by 0.4bps, to 0.32%. Spain’s 10-year yield gave-up 4bps, at 1.51% with Italy’s lower by 4bps at 2.08%, as the Irish 10-year yield gave up 0.05bps to 0.75%. Portugal’s 10-year ended lower by 4bps at 3.11% whilst the Greek yield gained 31bps to 5.85%. US 5 and 10-year yields inched higher by a respective 0.2%, with the 5 closing at 1.79% and the ten at 2.25%.

Commodities were mixed as $Oil fell by 1.7% to $49.8 a barrel, whilst the CRB slipped by a similar 1.7% and Copper by 0.6%. Within the precious metals space $Gold gained 1.2%, at $1268, $Silver was ahead by 3.1%, at $17.3, whilst in the paper-market, the XAU eased by 0.6%:

Economic data due for release during the holiday-shortened trading week for the US and the UK includes confidence readings for the US, the UK plus the Euro-Zone and Japan. Housing data is scheduled for the US, the UK and for Japan, with the US and Japan also updating on vehicle sales. The UK and the Euro-Zone provide the latest money-supply numbers, with the former also updating on consumer credit and the E-Z PPI. The April unemployment rate for Japan, the E-Z and the US will be released, with the US as the highlight of the week as it includes the closely watched non-farm payrolls.

Sicily has been an autonomous region of Italy since 1946 and is the largest Mediterranean island, with a population of 5m. Aside of having Mount Etna, the tallest active volcano in Europe, it is famed as the birthplace of the Cosa Nostra, or Sicilian mafia, hence it was a suitable venue for this week’s G7 (gang of seven) heads of state meeting. It formed part of a busy week for “the Donald’s” first trip abroad as the US President and after securing huge US investments from Saudi Arabia, including weapons of course, then meeting with the Pope, he pitched-up in Europe to give his fellow NATO members’ a roasting over not paying their fair share, a fact highlighted during his election campaign. Of the 28 members it appears that only 5 contribute the 2% of GDP agreed, with the US leading the pack at 3.6%, followed by bankrupt Greece at 2.4% with the German locomotive contributing just 1.2%, which possibly explains why it is Europe’s locomotive! As for the G7 meeting itself, German Chancellor Merkel was the longest-serving head at the summit with 4 leaders including DT attending their first one, they “agreed to dis-agree” on the thorny issues of climate change and trade. The Italian host, Paolo Gentiloni, said that an ‘equilibrium point” was found in the shape of a commitment to “keep our markets open and to fight protectionism,” while acknowledging that “trade has not always worked to the benefit of everyone.” It should be an interesting week ahead to watch the share price of the German car manufacturers.

                                                    “I’m gonna make them an offer they can’t refuse

NB the IMA indices are £GBP adjusted

 

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Critically Crude

The cross-winds are swirling in respect of the Oil price, as confusion reigns.

In the words of a typical economist, “on the one hand,” OPEC appear likely to renew their recent production cuts, in particular from Saudi Arabia and Russia who are desperate for higher prices, whilst “on the other hand” is the new swing producer, the United States, who are equally keen to ramp up the shale production, if for nothing more than to alleviate the debt and job-losses seen within that sector.

So what’s an Investor or end-user to do?

At its simplest ignore the chit-chat, views (economist or otherwise) and even the fundamentals, as they are speculation at best and guest-work at worse.

We set out within our “Oil Price Collapse….Why the Surprise” just why we like charts, because they never lie, whereas fundamental analysis, although useful, is open to conjecture and extrapolation of the past into the future, with the overview going on to demonstrate how our charts gave ample warning before the Oil price slump.

So what of these cross-winds?

First up we show a chart of the long-term price of West Texas Light Crude, monthly data points since 1997:

Aside of it reminding just how severe was the 2008 price crash, note the black-dashed-line, as it’s very important. It’s effectively a support-line, which gave way last year and is now under threat once again.

This uncertainty was evident within our 5-year weekly data chart below, which provides colour- coded signals indicating Buy /higher Oil price (green), Neutral/uncertain (neutral) or Sell/lower Oil price (pink), which are supported by other technical observations  not shown here:

 

As can be seen, the dip below the aforementioned $30 black-dashed-line of early 2016, was flagged as a sell but quickly turned to neutral, which suggested a false-alarm. Also note, the most recent colour-coded signals have repeated this.

Adding to the mix is the $US Index, which of course is Oil’s currency, and in itself is throwing up shorter-term cross currents:

 

By inverting the Dollar index (turning it upside down) shows the negative-correlation between these two asset classes of the past few years, albeit that the relationship is breaking down of late.

Fortunately for investors or for those within industry sectors who need to make decisions based on currency moves and/or the price of Oil, we provide a very cost-effective service, which can be accessed via Here OR Here

Taking the guesswork out of your decision making may be critical to your business and to your financial health, so why not give these a try?

 

 

 

 

 

 

 

Investment Markets Overview — W/E 19th May 2017

“Bread and circuses” was how the government kept the Roman populace happy by distributing free food and staging huge spectacles, whereas today’s equivalent is the welfare state and to bomb someone as a means of distraction during problematic periods. Well, stock-markets took a hit this week, following the release of a memo by former FBI Director James Comey which alleges an obstruction of justice by President Trump, the man who sacked Comey a week earlier. The airwaves and financial media were full of speculation over possible “impeachment proceedings” against “the Donald,”

when surprise, surprise the US administration decided to bomb Syria. They could have saved themselves and perhaps more importantly the lives of innocents who always end up as “collateral damage” by browsing our mid-week socionomic comment, “Impeachment? Wrong time, wrong mood!” Interestingly, this week also observed the President’s first overseas visit since taking office, to none other than Saudi Arabia, the number one arms buyer from the US, the Brits and the French. The Washington and its tribune “swamp(s)” appear to be getting murkier, albeit that the attack on Syria may have appeased “elite” Republican Trump critics like John McCain who has yet to name a country that he doesn’t wish to bomb.

Adding to the uncertainty this week was Brazil, where the Ibovespa stock-index tumbled by 8.8% and its currency, the real, by 7.3% on Thursday alone, as political crisis returned to the country despite last year’s impeachment process to clear its swamp. To continue reading the main economic and market events of the week, supported by interesting charts, please read on and for a limited time period non-subscriber’s can access the full report via the “at your discretion” pay what you think it’s worth offer:

Subscribe to the Full Investment Markets Overview Newsletter which contains the following:-

Additional Commentaries:
•US economic data . . .
•Euro-Zone . . .
•The UK . . .
•Out East . . .
•The $US index . . .
•Within the commodities complex . . .
•Economic data due next week includes . . .

 Returning to the “bread” analogy to today’s welfare state, this week also saw the release of the UK political parties’ election manifestos ……

Charts:
1.  Indices Weekly
2. US GDP & CPI V US Ave Weekly Wage
3. UK Retail Sales V UK Ave Wages
4. Japan GDP V Japan Deflator
5. Commodities Weekly

Table:

13 Indices, 11 columns of detailed information, for accurate analysis

                         “What goes up, invariably Falls at a quicker Pace” 

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