Platinum Content

Platinum Update – January 17th 2019

on January 17, 2019

Hi Folks

US futures are a little lower in Asia trade today with the S&P down around 18-20 points from the highs during the days session Thursday. That’s doesn’t mean the rally is over, but it does suggest my notion to go flat on stocks for a time in this morning’s Newsletter might be the right one for the moment.

Indeed the ASX and SPI are flat (9.05pm New York, 2.05am London, 10.05am Beijing, and 1.05 pm Sydney) are flat and Asia’s stocks markets are marginally red at present.

USDJPY is a little lower as well at 108.90 and the Aussie and Kiwi remain offered.

Let’s dive in.

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Greg MckennaPlatinum Update – January 17th 2019

Platinum Update – January 16th 2019

on January 16, 2019

Hi Folks

The risk rally continues with US stocks still pushing higher though Asia is in a less excitable mood than yesterday. We need more Chinese stimulus news perhaps because as I write at 1.17pm Beijing, 12.17am New York and 4.17pm Sydney Chinese and Japanese stocks are lower though the rest of the region is mixed with rallies in the Kospi, Straits Times and of course the ever ebullient ASX 200.

The USD is a little stronger too – but only marginally so. And of course players are still trying to determine what Theresa May’s defeat of her brexit deal really means.

Personally I’d bet this is a pre-determined strategy she’s pursuing, one that lessens the chance of no deal Brexit, and one that will put a bit of a bid under the Pound, against the USD and on the crosses.

Commodities like gold, silver, and copper remain in their bands though Shanghai commodities aren’t doing too badly

Lets dive a little deeper.

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Greg MckennaPlatinum Update – January 16th 2019

Platinum Update – January 15th 2019

on January 15, 2019

Hi Folks

China is trying to goose markets again after the awful trade figures yesterday fairly screamed SLOWDOWN.

They are cutting reserve requirements again, they are saying they’ll keep monetary policy accommodative and “strengthen counter cyclical adjustments”, they’ll cut taxes, and so on. They also fixed the Yuan a tiny but stronger against the USD when they could easily have been forgiven for letting it weakne a bit.

This combination has been positive for risk.

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Greg MckennaPlatinum Update – January 15th 2019

Platinum Update – January 14th 2018

on January 14, 2019

Hi Folks

We’re at a critical juncture in this risk rally – extension or exhaustion as you’ve heard me say and seen me write a number of times.

Bit while stocks are still the biggest game in town they aren’t the only game. GBP and the GBP crosses plus USDCNH/Y are also interesting.

Here’s a quick run through of the key highlights and opportunities that jump out of this week’s platinum Weekend Chart Scan.

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Greg MckennaPlatinum Update – January 14th 2018

Platinum Content – Cross Asset analysis and Chart scan January 12-13 2019

on January 13, 2019

G’day folks – Welcome to the Weekly Chart Scan

Extension or exhaustion – that is where we are at with this risk rally. The easy money has been made now it gets hard. And its earnings season in the US from this week too.

Much to talk about so let’s dive in.

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Greg MckennaPlatinum Content – Cross Asset analysis and Chart scan January 12-13 2019

Platinum Update – January 11 2019k

on January 11, 2019

The Fed goes uber-dovish

Hi Folks

There seems to be a real message emanating from the Fed right now that policy makers want markets – especially stocks, to understand. That message is two-pronged and rests on two key pillars.

The first is that the US economy is actually doing okay, better than the market carry-on of December was pricing. The second message is that with inflation staying low the fed can afford to be patient and wait and see if, when, the next move in rates will be. Associated with this second prong of the message that if necessary the balance sheet run-off, QT or quantitative tightening – may be adjusted.

As a result of the latest round of jawboning from the Fed during the Asian session today the US dollar is under a little pressure today.

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Greg MckennaPlatinum Update – January 11 2019k

Platinum Update – January 10 2018

on January 10, 2019

Hi Folks

The risk rally faltered a little bit overnight. I know I know, stocks in Europe and the US were still higher but at 2,571 as I write (10.43 pm Wednesday New York, 2.43pm Thursday in One Mile) the S&P futures are off about 25 points from the high during Wednesday’s session in US trade.

That high was associated with the release of the fed’s very dovish minutes and after the very dovish action of the various Fed speakers overnight – the very ones I suggested yesterday would likely be “a dovishly supportive crowd of speakers”.

With Chairman Powell and vice-chair Clarida among the Fed speakers on the Husting’s Thursday we’re likely to see more supportive comments.

But the reason we might like to wonder if the rally in stocks, and thus risk assets, is getting near an inflection point is that prices for the S&P 500, using it as the bellwether, are right in the zone. If I can put it that way.

In your weekend Platinum pack I noted with regard the weekly and daily S&P setups,

Weekly: JimmyR indicator (15 and 30 ema crossover) turned bearish for the first
time since April 2016 when the S&P was around 2,000/2,010 during December that turns the overall trend lower on this time frame. Price then exceeded my Dec 22 target of 2,500/2,523 and the subsequent further target 125 point below with the Christmas eve collapse. Subsequent recovery looks to have legs toward 2600 previous support and perhaps the 15 ema at 2,650.
Daily: Bullish engulfing Friday after some small falls in Asia gave way to a solid NFP and Fed induced rally. Target on break of the week’s high on a 138.2% basis is around 2,600. Support 2,489″.

Now, I’m not telling you what I told you to blow my trumpet – though last weekend’s Platinum pack did nail so many moves from stocks, to bonds, and currencies (please tell your friends, I’d like a few more clients). I don’t do it to blow my trumpet because at some point – this week, next week, today maybe – I’m going to get it wrong.

Rather I raise this to highlight that US stocks – again using the S&P as the bellwether – are back at important and significant resistance levels. And they’ve satisfied my initial targets of what still is a counter trend rally. So for me that’s a place to take some money, some risk, off the table – but that is just me, I’m a cautious trader. 

The Russell 2000 is at a similarly important juncture.

So far though – on the daily charts – other than hitting resistance and a little fall from last night’s highs on US stocks right now there is no reason to abandon the rally. But it’s largely hit the initial targets and the weeklies are still showing downtrends.

But, your money management is up to you and we could get that blow of toward 2,650 in the S&P first.

One market where the Fed’s dovishness isn’t fully priced in and where it is really starting to resonate is with the US dollar. I’m a longer term USD bull. But for the moment the bears have it and it is pointed down. I’ve covered my thoughts in the morning Newsletter which you can read here.

But, despite some pretty poor inflation data this morning in China (PPI 0.9% versus 1.6% expected and CPI 1.9% versus 2.1% expected) , despite appalling German trade data Wednesday (yes the surplus was okay but the underlying import and export numbers were awful) the USD is under pressure again in Asia.

Here’s USDCNH with an arrow pointing at the target I’ve been banging on about for week’s as Platinum and months in my own study.

So the greenback is offered and while USDCNH/Y may not get to the 38.2% retracement in a hurry. If it is anything like the USDSGD or the daily USDCAD then it will grind there eventually.

Just like the moves in US stocks drive many other markets so too do moves in the USD drive assets and markets – including commodities.

So we need to watch this space.

Daily Chart Scan

  1. You can see the volatility in the MACD of this table of assets and prices…from risk off last week to risk on this week. Sustainable or ephemeral – that for me is the big questions. Only changes in the MACD today gold pointing higher again (but still needs to break Friday’s high to kick), USDJPY, which is pointing lower again, and EURGBP.
  2. At the moment I’m still treating this rally in stocks and risk as counter trend. But the reality is that It’s usually worth riding the MACD turn to see how far it runs. Just look at oil and gold recently.
  3. So you may be forgiven for thinking the the market is schizophrenic. Which is exactly what it is right now. As noted this week, the question is whether the emergence of the Powell Put stabilises the outlook for a period long enough to retest highs.
  4. Times like these, when traders are uncertain it it is an inflection, transition, or continuation, are always fraught. It is why I trade with smaller size and take money off the table relatively quickly.
And to UPDATE from this mornings Newsletter here’s the

Macro Positioning Thoughts that flow from my analysis of the Platinum Scan and the daily iterations

These are the core views impacting markets and suggesting positioning.

  • The Fed has blinked – we can almost ignore good US data, should it come – with this backdrop. This provides a constructive backdrop for risk.
  • China is stimulating – tis is positive too though their data is awful.
  • Global growth is slowing.
  • The USD is under pressure – it has further to fall (but the Euro is like one of Cinderella’s siblings)
  • There was a rush to the exit for stocks in December and they are having a counter trend rally at the moment.
  • Bonds are likely rise further in rate.
  • Gold and Silver are seeing their rally stall as stocks go bid – but the USD is keeping prices more elevated than I thought. Inside days a warning of the next move.
  • Oil has broken important resistance and is pointing higher.
This will evolve folks and besides the chart scan it will be different each day. It wasn’t part of my original plans but I think it an important communication method for my inner sanctum of subscribers.
FEEDBACK IS ALWAYS WELCOME
Have a great day
Greg 
@gregorymckenna on Twitter
The Information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any particular trading strategy. Readers should seek their own advice. Reproduction or redistribution is ONLY allowed with permission. Please speak to Greg McKenna to obtain same.
Copyright © 2018 gregmckenna.com.au, All rights reserved.

 

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Greg MckennaPlatinum Update – January 10 2018

Platinum Update – January 9 2019

on January 9, 2019

Hi Folks

And we are still seeing risk rally.

Stocks rallied in Europe and the US on Tuesday and Wednesday is a sea of green across Asian and Australian stock markets with some solid rallies.

That makes sense as the Powell Put takes effect and as traders react to the fact they now think they may have overreacted in the thin holiday period. Trend indicators are still down for stocks though. But I agree with JP Morgan CEO Jamie Dimon that the next US recession is nowhere close. That may mean the Fed’s messaging changes again in the future once the data starts to improve. Indeed the Atlanta Fed has upgraded its GDPNowcast from 2.6% to 2.8% for Q4.

That’s still above the US’s growth potential and so is likely to see the jobs market remain strong and unemployment remain at or below 4%. Bonds have noticed that too and they are rising. But they are also rising because risk is on and oil is rising. That in turn is feeding inflation expectations which are on the rise.

So my question for you dear Platinum Members is this, at what level does the increase in 10’s back to 2.72/3% and associated moves in shorter and longer rates start to become an impediment to this risk rally. At what level of interest rates or risk recovery then drives a recalibration of the free pass – the Powell Put – that the Fed Chair has just offered US data should it print stronger than the market currently forecasts.

Indeed, it’s not a big move but a the chances of a December hike are back up close to 25% with the chance of easing having been reduced in the past week. That’s still too weak an implied outlook for the US economy based on my view of growth across 2019. But the markets pricing is supported by and in keeping with the message from Fed speakers like Robert Kaplan, Jerome Powell, and Raphael Bostic so far in the past week.

What’s important about that is in the next 36 hours we hear from Charles Evans twice, Fed Chair Powell, his vice-chair Clarida, and James Bullard – if that’s not a dovishly supportive crowd of speakers for stocks and risk I’ll be surprised. Clearly traders are betting that too as US futures are pointing higher in night trade and as Asian and Australian stocks point strongly higher.

Back to my original question though. When will bond rates become a handbrake on stocks? Probably not yet and certainly not unless the 10’s rise sharply through 2.8% and back into the 2.9% and above region. Don’t rule it out, it’s just a little too soon yet.

Daily Chart Scan

  1. You can see the volatility in the MACD of this table of assets and prices…from risk off last week to risk on this week. Sustainable or ephemeral – that for me is the big questions.
  2. At the moment I’m still treating this as counter trend. But the reality is that It’s usually worth riding the MACD turn to see how far it runs. Just look at oil and gold recently.
  3. So you may be forgiven for thinking the the market is schizophrenic. Which is exactly what it is right now. As noted this week, the question is whether the emergence of the Powell Put stabilises the outlook for a period long enough to retest highs or at least test last week’s lows to give the bulls some confidence.
  4. Times like these, when traders are uncertain it it is an inflection, transition, or continuation, are always fraught. It is why I trade with smaller size.
And to UPDATE from this mornings Newsletter here’s the 

Macro Positioning Thoughts that flow from my analysis of the Platinum Scan and the daily iterations

I think this is a better way to reflect my views in a manner you can get value from. 

  • The Fed has blinked – we can almost ignore good US data, should it come – with this backdrop. This provides a constructive backdrop for risk.
  • China is stimulating – tis is positive too though their data is awful.
  • Global growth is slowing.
  • The USD is under pressure – it has further to fall (but the Euro is like one of Cinderella’s siblings)
  • There was a rush to the exit for stocks in December and they are having a counter trend rally at the moment.
  • Bonds are likely rise further in rate.
  • Gold and Silver are seeing their rally stall as stocks go bid – lower levels beckon.
  • Oil has broken important resistance and is pointing higher.
This will evolve folks and besides the chart scan it will be different each day. It wasn’t part of my original plans but I think it an important communication method for my inner sanctum of subscribers.
FEEDBACK IS ALWAYS WELCOME
Have a great day
Greg 
@gregorymckenna on Twitter
The Information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any particular trading strategy. Readers should seek their own advice. Reproduction or redistribution is ONLY allowed with permission. Please speak to Greg McKenna to obtain same.
Copyright © 2018 gregmckenna.com.au, All rights reserved.

 

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Greg MckennaPlatinum Update – January 9 2019

Platinum Update – January 8 2019

on January 8, 2019

Hi Folks

The risk rally held overnight with Raphael Bostic, the Atlanta Fed President, saying he favours just one rate hike in 2019 and that the US economy is solid. In that short sentence you can see the seeds of the next big leg higher in US stocks and those risk appetite if the data starts to print more positively.

It’s probably too soon for that at the moment with Friday’s non-farms still the only bright spot on an otherwise darkening US and global economic data flow backdrop.

Indeed last nights release of the December ISM non-manufacturing, which covers the bulk of the US economy, was agina disappointing. Not weak, but softening. And as I suggested in this morning’s Newsletter it could presage weakness ahead for the overall US economy.


source: tradingeconomics.com

That’s something that is constraining stocks, so while the risk on tone remains in evidence there is still lots of caution in the market and from traders about the outloor stocks as we get ready for earnings season to kick off next week.

Not from the  investment banks though it seems – they are bulled up according to yahoo Finance’s Sam Ro.

It’s a valuation thing. And it fits along the lines of the chart I shared last week about all the bad news being priced in and maybe we were just all too bearish.

But that does not mean the selling is ended. Indeed in a purely technical sense this is still just a counter trend rally. And it is interesting that Oil and the S&P 500 (as the global bellwether) pulled up at the 30 ema on the daily charts. That’s normally a sign for a trend continuation.

So we’ll see  how it goes tonight, but the set up is for further gains at the moment – and thus further gains for risk assets – before it, and they, stall.

2,570 is the key level for the S&P futures. Here’s the chart of the futures based CFD as at 3.14pm AEDT (11.15pm New York)

Daily Chart Scan

No material changes from yesterday’s note:

  1. You can see in this week’s scan the shift with the turn in the MACD of stocks and bonds with Friday’s rally moving into today. A close at or above current levels would be certainly very bullish for the risk case. You’ll also note the AUDUSD and NZD are having counter trend rally indicators from the MACD as well.
  2. Copper too has turned higher after the big bounce and surge of 3% Friday.
  3. If you read this compared to Friday’s highlights you’d be forgiven for thinking the market is schizophrenic. Which is exactly what it is right now. The question is whether the emergence of the Powell Put stabilises the outlook for a period long enough to retest highs or at least test last week’s lows to give the bulls some confidence.
  4. Times like these, when traders are uncertain it it is an inflection, transition, or continuation, are always fraught. It is why I trade with smaller size.
And to repeat from this mornings Newsletter here’s the 

Macro Positioning Thoughts that flow from my analysis of the Platinum Scan and the daily iterations

I think this is a better way to reflect my views in a manner you can get value from. 

  • The Fed has blinked – we can almost ignore good US data, should it come – with this backdrop. This provides a constructive backdrop for risk.
  • China is stimulating – tis is positive too though their data is awful.
  • Global growth is slowing.
  • The USD is under pressure – it has further to fall.
  • There was a rush to the exit for stocks in December and they are having a counter trend rally – but failed at important resistance today.
  • Bonds are consolidating recent gains – but likely rise further in rate.
  • Gold and Silver are seeing their rally stall as stocks go bid – but had inside days.
  • Oil stalled at important resistance but is pointing higher still.
This will evolve folks and besides the chart scan it will be different each day. It wasn’t part of my original plans but I think it an important communication method for my inner sanctum of subscribers.
FEEDBACK IS ALWAYS WELCOME
Have a great day
Greg 
@gregorymckenna on Twitter
The Information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any particular trading strategy. Readers should seek their own advice. Reproduction or redistribution is ONLY allowed with permission. Please speak to Greg McKenna to obtain same.
Copyright © 2018 gregmckenna.com.au, All rights reserved.

 

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Greg MckennaPlatinum Update – January 8 2019

Platinum Update – January 7th 2018

on January 7, 2019

Hi Folks

Welcome to my daily Platinum update. Each day you receive the Markets Morning newsletter as well as the Markets Morning video. This combination is meant to build on the weekend work I do – and you recieve – in the weekly chart scan pack.

But I each day I also want to share with you the daily screen of the main markets I cover as well as any updates and thoughts on specific markets space and time doesn’t allow in other venues.

To wit, here’s a quick video on the core highlights of the weekend Platinum Scan

HERE’S the link to Vimeo with the video embedded below.

Vimeo password: Plat07012018

Otherwise you have a feel for what I’m thinking right now – counter trend rally which might have some legs left to test the resolve of the stocks and oil bears, the USD bulls, and the bond buyers.

Daily Chart Scan

A few things worth noting:

  1. Last week  I mentioned on numerous occasions the volatility in the market overall and then again in the swings in sentiment and indicators like the MACD. That cost me money Friday when the S&P 500 signal was about 100 points wrong with the sell signal. Small position, 3 grand dusted.
  2. But you can see in this week’s scan the shift with the turn in the MACD of stocks and bonds with Friday’s rally moving into today. A close at or above current levels would be certainly very bullish for the risk case. You’ll also note the AUDUSD and NZD are having counter trend rally indicators from the MACD as well.
  3. Copper too has turned higher after the big bounce and surge of 3% Friday.
  4. If you read this compared to Friday’s highlights you’d be forgiven for thinking the market is schizophrenic. Which is exactly what it is right now. The question is whether the emergence of the Powell Put stabilises the outlook for a period long enough to retest highs or at least test last week’s lows to give the bulls some confidence.
  5. Times like these, when traders are uncertain it it is an inflection, transition, or continuation, are always fraught. It is why I trade with smaller size.
This will evolve folks and besides the chart scan it will be different each day. It wasn’t part of my original plans but I think it an important communication method for my inner sanctum of subscribers.
FEEDBACK IS ALWAYS WELCOME
Have a great day
Greg 
@gregorymckenna on Twitter
The Information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any particular trading strategy. Readers should seek their own advice. Reproduction or redistribution is ONLY allowed with permission. Please speak to Greg McKenna to obtain same.
Copyright © 2018 gregmckenna.com.au, All rights reserved.

 

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Greg MckennaPlatinum Update – January 7th 2018