Tag Archives: markets

31 May

This weeks analysis

I have enjoyed a rare Monday off work. The UK had one its dozen or so bank holidays today, and the US markets were closed for Memorial Day.

It meant an opportunity to sleep a little longer and take a long walk along the beach and reflect on life in general.

I grabbed my phone and called as many UK friends as I could get hold of. The mission was simple. What are you going to vote on the 23rd June?

My phone reveals I called 17 friends (I thank them for letting me disturb them on their Bank Holiday Monday – a very sacred day in the British calendar – a day where you can with justifiable reason get pissed on a Sunday night without remorse).

Of the 17 people I called, who predominately are financial professionals, there were not a single one of them who would vote to stay in the EU. I was quite surprised, so when I pressed for a reason, I got the same answer over and over:

  1. Emigration Concerns
  2. Bureaucracy

Most of them felt there was something very disconcerting about the whole campaign. “It feels like scaremongering rather than a democratic debate”, one said.

Amen. I am not allowed to vote naturally, so I can stand aside and observe my poor friends attempting to sort shit from channel. AND there is a lot of the former.

Those two points above don’t actually have much to do with the original plan for a Common Union. The Union was intended to increase trade flow and thereby also competition and it did. The emigration concern is a another point altogether, one that reflects a growing concern of democratic impotence, as a super power beyond reach decides from afar what is right and what is wrong.

The Brits are individuals. They always have been. Someone should remind them in what dire straits they were in during the 1970’s despite their membership of the union, and how they sorted themselves out in the 1980’s under a certain Iron Lady. That had nothing to do with the EU, and everything to do with the spirit of a United Kingdom.

In the Financial Times I found a quote from Nifco’s Mr Matthews: why would Britain even contemplate leaving the EU. You have enough challenges in business as it is. Why would you put yourself in a more difficult position?

Yes, indeed. Why would you? May I offer an answer? Because life is more than just business, and the EU has moved from being just about business, to being about what you can and can’t buy, what you have to wear and what you can’t wear:

http://www.dailymail.co.uk/health/article-186684/EU-outlaw-popular-vitamins.html

https://fullfact.org/europe/eu-banning-high-heels-hairdressers/

and then there was the one about the bent bananas:

http://www.telegraph.co.uk/news/worldnews/europe/2453204/Bent-banana-and-curved-cucumber-rules-dropped-by-EU.html

I was asked what I would vote. I said I had not made up my mind. However, for those Brits who are reading this blog (the reason I write it in English is so both the super intelligent Danes with their amazing language abilities (!) and the “why would I need to learn another language – you all speak English” Brits – can read it) I would like to take this opportunity to remind you of a few things:

  1. You were great before the EU. You joined in 1973 with Denmark and Ireland. If you vote to stay, you may just risk that you will slowly and surely be stripped of your ability to self-regulate. Did you see this one: http://www.dailysquib.co.uk/business/19041-eu-wide-tax-id-numbers-planned-keeping-track-of-every-citizen-in-europe.html
  2. Do you ever wonder how Norway and Switzerland have managed to stay so wealthy? Norway is the 6th richest country in the world (oil), and Switzerland is number 10. Denmark is number 21 while Britain is number 27.Norway and the Swiss refuse to be part of the EU. They are doing fine!

Enough said. It is not that I don’t see the argument for a union. It is the argument that I am unable to decide what I do in my own house, because I have signed up for a union which is SO MUCH MORE than just a trade union. It is a union on how to live my life.

This week will be explosive. We have the end of the month coming up. We have a banking sector which is beginning to move in anticipation of a rate hiking cycle in the US. Deutsche Bank has rallied 20% in the last week!!!

We have a Non-Farm Payroll release on Friday; one of the most eagerly anticipated numbers all year, now that the rhetoric from the central bankers of the US is heating up, agitating for a rate hike.

You also have the ECB talking on Wednesday.

How do I stand? After the strong rally off the lows in the DAX index, I think we will see higher prices going into June. I think the market is ready to begin a protracted rally into September, as long as the fundamentals (Friday!) can substantiate it.

12 Apr

12 April 2016 – thoughts ahead of the day

In my weekend analysis I wrote that I was bearish stock indices. I based that opinion on a method I have developed over the years. I have used it to forecast many tops and lows over the last 15 years. The forecast is based on weekly charts, so I am not too concerned what happens intra-day. This method is used to trade the big moves.

So going into the trading day Monday (yesterday) I knew that this week could be the beginning of a very substantial move down. I immediately started shorting indices yesterday morning, and I thought I was going to get rewarded for my boldness. That was not to be. Someone somewhere said something. Who know what they said, but the effect was obvious. The market reversed on a dime, and the DAX was strong all day.

The Dow took its cue from the DAX and it too rallied most of the afternoon. It is during times like that you begin to question your forecast. It is also during times like that – that you have to remind yourself that the forecast is based on weekly charts, so it should not matter what happens from minute to minute intra-day.

This leads me to the point of this story: who is buying? Who is it that is buying? How many times over the last week of trading have I seen a very strong open in the Dow, and then it all just fizzles. The Dow probably should be stronger. The dollar is strong, albeit a little weaker over the last 10 days. Oil is recovering well. Yet whoever it is that is pushing the Dow up during the first hour hasn’t got the ability to keep it there.

Monday’s trading session was bad news for the optimists. There are no buyers above 17,700. Now we are 150 points lower again, and my forecast is looking better. I digress. Let us trade the market, and not the forecast. Anyone can forecast, even me, by flipping a coin, and calling heads bullish and tails bearish.

There is no traction in the Dow above 17,700.

There is no traction in the Dow above 17,700.

Instead let us understand what is going on underneath “the bonnet of the car”, so to speak. Stocks got what they want, didn’t they?

  1. Central banks are behind them – supporting them
  2. Oil is recovering well – another $10 and it has doubled since the low of $25
  3. There is so much worry about earnings, yet the Dow is sat just a few hundred points from an all-time high.

And yet we keep failing at the most critical times, like today. AND why is Gold so strong? WHY is YEN so popular (safe heaven).

11 April 2016 Dax index 30 min chart

The DAX index is displaying perfect harmonic moves, which suggest we are headed back down to the lows.

Conversely, we keep “failing” – or not failing, as it is – just as the markets look like they are about to free-fall. Something is still supporting the market. It is turning out to be quite the tug-of-war, and I think the earnings season will force a solution.

Here is my position: I have put on long-term short positions in stock indices. I have a sell signal, and I have executed the plan. In between I will trade in and out of the market day trading style, like a good student of the markets.

I will talk to you again tomorrow.

Tom Hougaard

Tom Hougaard

09 Mar

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27 Jan

Dr Paul – Commodity Analysis 27th Jan 2015

Gold and commodities

The Gold market is at a very important juncture. Is the 100$ move north in January the start of a new impulsive wave or merely a corrective wave preceding further downside.

At present the daily view shows a Gartley in process and from that we should see a selloff to at least 62% of the upswing. The G222 is shown in the first chart and the second shows the target.

1

If the Gartley pattern should fail then that would be very positive for Gold and add to the case that the bear trend in Gold is complete and that the treble bottom shown on the third weekly chart is holding. The Macd is showing bullish normal divergence which adds to the evidence of a bottom.

Those holding Gold shares on a long term view should give the Gold market the benefit of the doubt and hold a bit longer.

Traders should watch very carefully. If this bottom can hold there can be a massive move in marginal Gold stocks.

3 2

All commodities look pretty much the same including the softs of Soybeans and wheat. All have had protracted bear markets but still precious little confirmation of a turn.

The oil market is still on the way down but sitting on long term support that’s been in place for many years.

Dr Paul - Commodity Analysis

Please remember that a long and tough bear market is a pre requisite for a strong bull market in the future.

I am watching BIL for an entry but it’s still early. In the UK there are dozens of oil stocks both large and miniscule that are worthy of attention.

It’s a very exciting time in commodity related stocks. That’s an insight that’s missing from the popular debate.

David Paul