Feb 6, 2018 - Market Update (No recession short-term, healthy correction done, no global contagion, so let's hunt for bargains; One Fed hike is priced off; Watch today for Trys yields, JPY crosses, VIX; New turning points for VIX at 22 & 30; XIV a problem for Credit Suisse; BNSF Railway (part of Berkshire) joining Blockchain in Transport Alliance; Hedging by book: long gold, JPY, 10- and 30-yr Trys; The panic is over, moving to the last leg up of 2009 bull run;German coalition talks well covered blockchain)

Short recap

Asia in red

Europe opening lower

US Congress to vote on government funding

German coalition talks well covered blockchain technology to make Germany a fintech hub

Draghi not ok with EUR volatility due to potential inflation miss

Kuroda – no near-term hikes

Question – what now?

Honestly, I am not sure either…

…as Janet is celebrating and Powell not being able to find the “Buy” button

Market is down and Trump focussing on long term fundamentals and not the short term sell off

It reminds me local CEE politicians who cheer and show up in the public only in good times

Let’s sum up a bit

S&P 500 was 12% above 200 DMA – markets do not stay very long 10% above 200 DMA

(for regular bull market it is between 5-10%)

Technicals showed way-overbought markets

Most of the market followed the same direction (robots, ETFs, investors selling volatility) for months/years

Selling volatility/insurance and now covering positions

But after market dropping more than 6% all start to hedge (thus more selling)

S&P 500 found support at 2538 (200 DMA) after touching low of 2530

DAX didn’t care about 200 DMA and found support around 2015 highs, 2017 support levels

And below 12 275 (76.4% Fibo) after printing 12 141 low

VIX skyrocketed above 33 (up 113% on a day) but corrected (25+ levels signal market fear)

XIV (short volatility ETF) plunged (speculation that Credit Suisse lost USD 500 mln)

Let’ wait for official comments

Hedging based on history

Long Gold – pretty unmoved (sitting right below resistance zone (1357-1375)

Long JPY – sitting right lows of 108.12/107.31 acting as support but not very affected

Long 10- and 30-yr Trys – enjoyed very decent rally yesterday

Why to hedge?

CBs believe in rising rates globally on inflation pressures and strong growth

But China is slowing down and coping with huge credit problems

US economy topped, EU to follow soon and as Japan population is old, the lag

Example from 2011 – losses prior week, losses on Monday, more at the open on Tuesday

And recovery taking more than half a year…

What to do next?

As there is no recession risk near term, the healthy correction & late stage bull market panic is done

Stock markets will hopefully find their calm soon

So we can focus on hunting as a part of final leg up of the bull market that started back in 2009

…but be aware of:

FX, EM unaffected (EM equities down only 5%) – a positive sign

One Fed hike is priced off; If volatility continues another one can get priced off

No global contagion – a positive sign  

Watch today for Trys yields, JPY crosses, VIX (can fly in both directions with turning points at 22 or 33)

JPY 1m ATM vols (jumped from 6% to 10%)

Equities

Broadcom bidding for Qualcomm (USD 121 bln)

Bayer to sell more assets (seeds/pesticides) to please EU as it buys Monsanto

Elliot Advisors don’t like BHP’s dual listing (among other things)

Energy stocks still worth of looking at (also multiplied by recent sell off)

Boeing keen on a new mid-market jet

Bristol-Myers still behind Merck with cancer drugs testing data

Apple and Cisco come together to work with insurance companies on cyber policy products

Banks moving away from models to stock picking on new research rules

BNSF Railway (part of Berkshire) joining Blockchain in Transport Alliance

Earnings

Allergan, GM, Gilead Sciences, Walt Disney

S&P 500 daily

DAX daily

Source: Saxo Bank

Bonds

10-yr Trys yield at 2.65% vs 2.86% yesterday

Yield at 3.00% a buying opportunity?

10-yr Bund yield at 0.73% vs 0.76% yesterday

Bitcoin

Bitcoin's Brutal Week Is Even Worse in South Korea  link

So-called kimchi premium disappears amid government clampdown

Bitcoin prices globally are sliding to their lows of the year

Data/events

ECB’s Weidmann (0900 GMT)

Fed’s Bullard (1350 GMT)

Feb 16 – Chinese New Year

Mar 4 – Elections in Italy

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

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Oct 12, 2017 - Market Update (FOMC Minutes - debated inflation, JPMorgan & Citigroup reporting, Goldman Sachs back to investment banking?, EURUSD above 1.1830, heading to 1.2000 but..., CZK on the horse, Gold - which way now?, Homework time for Catalonia until Monday)

Short recap

Asia up reaching 10 yr high

Europe opening flat to lower

Spain gave until Monday Catalonia to drop independence

Otherwise will take over all powers over the autonomy region

Oil inventories rising even though OPEC is cutting production

FOMC Minutes – inflation debate intensified

Some patience to assess inflation path warranted

But others are looking at Dec hike

Doves and Hawks at Fed  chart

Repatriation tax rate at 10% according to Trump

Equities

A bit of reminder of .com area – A Biotech Company Changed Its Name to ‘Riot Blockchain’ and Its Stock Is Surging  link

Japanese equities may still look interesting but don’t forget that BoJ is still active in the market

Better days for banks ahead?  link

May get support from rising rates that will translate to higher profit margins

Citron (short seller) – looking to publish more of their research on Shopify

JPMorgan – should report a bit better results, focus on trading and loan business

Citigroup – expecting slight disappointment earnings

BlackRock enjoying the bull run as index investors take the AUM to USD 6 trln

Goldman Sachs looking to return to investment banking as it is looking for new deals

Bonds

10-yr Trys yield at 2.34%

10-yr Bund yield at 0.46%

Wealth manager warns on bond markets creating the 'biggest financial crisis of our lifetime'  link

Are bonds ready for a quick reversal as central banks look to remove QE?

Bond markets are at certain point illiquid

Guessing that ECB knows this one better as they have sometimes troubles to find suitable available bonds to buy

EURUSD

Catalonia is over for now, markets turning attention back to EZ macro

Back above 1.1830, opening the door for 1.2000

Resistance at 1.1910

Support at 1.1862 (23.6% Fibo), 1.1845 (100 DMA)

USDJPY

Resistance at 112.61 (10 DMA), 112.70 (Ichimoku turning line)

Support at 111.89 (200 DMA), 111.85 (23.6% Fibo)

EURCZK

CZK on the rising wave, now below 26.00

Resistance at 25.88 (10 DMA), 25.97

Support at 25.47

Bear in mind that it is still too early read the charts after CNB 27.00 floor adventure

But at least weekly chart can give us some clues where we are heading to

CNB sitting on tons of foreign reserves and now losing money

Some politicians calling for joining EUR

General elections taking place on Oct 20-21

 Source: Saxo Bank

Gold

Resistance at 1295/96 (highs), 1297 (50 DMA), 1299 (38.2% Fibo)

Support at 1281 (50.0% Fibo)

Source: Saxo Bank 

Data/events

ECB’s Draghi (1430 GMT)

ECB’s Praet (1430 GMT)

Fed’s Brainard (1430 GMT)

Fed’s Powell (1430 GMT)

ECB’s Coeure (2000 GMT)

ECB’s Lautenschlaeger (2010 GMT)

Fri

Fed’s Rosengren (1230 GMT)

ECB’s Constancio (1415 GMT)

Fed’s Evans (1425 GMT)

Fed’s Kaplan (1530 GMT)

Fed’s Powell (1700 GMT)

Oct 18 – China National Congress

Oct 22 – Japanese elections

Oct 26 – ECB

Nov 1 – FOMC

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

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Sept 12, 2017 - Market Update (Risk off on NoKo, Irma, higher bond yields, change in CNY policy, Cryptos banned but PBOC supporting blockchain, Regulation to come, Samsung cheering over Note 8, Apple's new iPhone 8 with USD 1000 price tag?, Gold prone to correct to 1300 if no risks off, Japanese stocks ok as long as USDJPY above 108.00)

Short recap

Asia printing 10-yr highs

Europe opening higher

Jump in bond yields supporting risk on

China likely to change policy in order to avoid quick appreciation of CNY

New milder sanctions against NoKo approved by UN

No NoKo reaction yet, markets relieved a bit

Brexit repeal vote approved, a huge relief for May

Some ECB officials pretty hawkish yesterday but no policy change indication

China’s ICO (crypto) ban targeting illegal activities only 

PBOC ok with blockchain technology as such

Equities

Samsung cheering the pre-orders for new Note 8 well beating Note 7 success

Volkswagen to invest EUR 20 bln into e-cars

Buying a new sunglasses? EU not happy with Luxottica-Essilor merger (EUR 46 bln)

Apple to show new iPhone 8 but what about the price of USD 1000 ?

Equifax facing hard time after getting hacked

Cancer immunotherapy an option?

BP goes IPO with some US assets

Citi down 15% with trading revenue

Societe Generale selling 49% of its Chinese AM to Warburg Pincus

Japanese stocks should do well as long USDJPY stays above 108.00

Bonds

10-yr Trys yield at 2.13%

10-yr Bund yield at 0.33%s

DXY

Short term strength in USD here as US yields, stocks

Popped up yesterday but need to sustain the gains today too

After showing the hammer at the low last week is now creating a morning star

Fed hawks on the crossroad as they need to reassess the impact of hurricanes on potential Dec hike

Strong support at 91.88 (2016 low), then 89.00 area

Gold

May be prone to correct to 1300 on NoKo, Irma risk off and higher US yields

Data/events

ECB’s Constancio (1345 GMT)

Sep 19-20 FOMC

Sep 21 – Brexit – a major speech from May expected

Is UK sort of reshuffling priorities or looking at a reset of talks?

Oct 18 – China National Congress

Oct 26 ECB

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

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June 15, 2017 - Market Update

Short recap

Asia lower

Europe opening lower

FOMC – more hawkish than expected

Inflation expectations adjusted but Yellen sees a good ground for prices to keep rising

Likely start to taper in Sep, another rate hike in Dec

Some may ask why Fed doesn’t want inflation to overshoot

Trump under investigation for obstruction of justice

Looks like they are still trying to find something on him or is he really such a mess…?

ECB’s Nowotny questioning 2% inflation target as tons of money still not pushing prices to the target

Equities

Nokia entering the router market, where Juniper and Cisco do well, by launching the fastest network chips

Rosneft going offshore

Private equity eager investors pump USD 7 bln to new fund from Goldman Sachs

Bank of America sees opportunities in international cash management

US banks eying Saudi’s market as Morgan Stanley and Citi are there, and Goldman Sachs applying for a license

Looks like few reforms, upcoming Aramco IPO, Trump’s visit can make Saudi Arabia an investment destination

Google reached an agreement with Indonesia over future tax payments (I like this one…who wouldn’t like to cap the upcoming tax bill)

Thomson Reuters launching a set up to offer its data flow via blockchain technology

So the firms can use Ethereum and Corda based trading systems with Reuters data

US financials, especially life insurers, to benefit from rising rates

While utilities, telcos and real estate on short term negative side

Resources stocks to offer an interesting value

In particular energy but need some credit events and cleaning within the space

Canadian Natural Resources, AltaGas, Roxgold can be looked at

Bonds

10-yr Trys yield at 2.14% - yield development is crucial for further direction of EURUSD and USDJPY

10-yr Bund yield at 0.23%

EURUSD

What’s next? 1.0500 again or 1.1500? …asked the questions yesterday but today too…

Consolidation lower after FOMC is on the cards

Resistance at 1.1231 (10 DMA) with sellers sitting around

Then 1.1300 (based on FOMC price action)

Support at 1.1200, 1.1180 (23.6% Fibo) and 1.1120 (38.2% Fibo) but strong at 1.1013 (61.8% Fibo)

USDJPY

Bids sitting between 109-109.50

Offers seen going to 110.00

With decent options expiring today and tomorrow at this level

Crucial resistance at 110.50 (61.8% Fibo) and 110.61 (200 DMA)

Support at 109.60 (76.4% Fibo), then at 108.12

Upcoming Data/Events

Basel Committee concluding meeting over bank rules

ECB’s Draghi and Coeure at Eurogroup meeting

Greece – any resolution? Again at least temporary?

Fri – Fed’s Kaplan speaking

June 18 – French Legislative (Parliamentary) elections

June 19 – Brexit talks starting ?

Should you have any questions feel free to contact me anytime.

Good luck Champs!

Mr Hawk

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

  

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