Platinum Content

Platinum Update – January 2nd 2018

on January 2, 2019

Hi Folks

Welcome to my new 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, SILVER HAS BROKEN OUT. 

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Greg MckennaPlatinum Update – January 2nd 2018

Platinum Content – Cross Asset analysis and Chart scan December 22 and 23 2018

on December 23, 2018

G’day folks – Welcome to the Weekly Chart Scan

It’s been a huge week for markets. Stocks collapsed and fear is palpable. The Fed disappointed expectations and the President is apparently not happy with Jerome Powell and his colleagues either.

So as much as many of you are in holiday mode Markets have shown a level of funkiness that recalls a similar period earlier this century.

Much to talk about so let’s dive in.

But before we do here’s a little intro video from me to you, my Platinum readers.

Cheers and thanks,

Greg

Here are the key takeaways from this week’s analysis

INTERNATIONAL MACRO

  1. There has been a genuine deterioration in global economic data prints with every major bloc and nation save for BRICs in negative territory. In Europe that deterioration has been acute. This is the basis for concerns about the global growth outlook hurting markets right now.
  2. All major stock markets save for the Hang Seng have collapsed sharply in the last week. Many have broken important levels, and most have a bearish outlook especially on weekly and monthly time frames. Thin liquidity over the turn of the year will exacerbate volatility up and down. But I’m firmly in sell rallies mode or hold shorts.
  3. The correlations on a 20 and 35 day basis between stocks, gold, bonds, the AUD and AUDJPY show this is a full blown market funk with correlations trending toward one. That’s dangerous.
  4. Fed muffing its lines and apparent threats by President Trump to sack Fed chair Powell wont help sentiment. Favour stocks lower, bonds lower, commodities – non precious – lower and USD rangey unless 1.12 and 97.70 break in Euro and DXY terms. Yen to outperform in current environment, Aussie under perform.
  5. My trade truce scan suggests the market does not yet believe a deal will be agreed. Something Peter Navarro seemed to confirm late in US trade Friday.

FOREX (Majors, Major Crosses, Aussie Crosses )

  1. The USD remains in a broad uptrend and is on the cusp of breaking out in DXY terms if 97.70 holds on close. That must happen for the topside to open up. Unless or until it does – and unless Euro breaks down through 1.12 for example – all we have is broad range trade. A break and hold above 97.70 and below 1.12 points to 100 and 1.08 initially – with associated moves in other USD based pairs. A break of 96.00 or 1.1520 would open substantial USD downside. But longer term targeting EURUSD 1.08 then 1.03/04.
  2. Risk/Commodity currencies like the AUD and NZD and the CAD are again under pressure as they reverse recent counter trend rallies and as traders bet on a global slowdown.
  3. There are some very good set up in the crosses (Euro, Yen, and GBP) as a good way to extract the USD from trade as they are at interesting junctures.

COMMODITIES (Gold, Silver, Copper, WTI, Brent, Bitcoin) 

  1. Gold’s topside is opening up as a risk hedge and now that it has broken above and held the 200 day moving average. Layers of support suggest a test toward $1,275 and $1332 medium term. Silver looks very interesting just below resistance (has to break first though)
  2. Copper and Oil have both broken down and are setting up for further weakenss.
  3. Bitcoin – THERE IS NO BULLISH CASE long term but it is experiencing a counter trend rally which may have legs.

US 10’s 

  • Closed right on support. 2.63% seems to be in the frame.

Stocks (S&P 500, Dow, Nas100, SPI200, DAX, FTSE, CHINA A50, Nky225, HSI) 

  1. US markets are driving stocks globally. But this is also part of a generalised market funk about global growth. There is a high level of correlation on cross assets supporting this. A sustainable recovery in individual markets requires a recover, or at least base, in the US.
  2. Whatever the result of the turn and thing liquidity the generalised outlook with medium term trends is for lower stock prices.

TYING IT ALL TOGETHER

Risk appetite fell off a cliff after the Fed failed to react to market fears about the outlook IN THE WAY THE MARKET WANTED. I argue they did react, they downgraded forecasts and signalled a pause is coming. VERY SOON. But fed by a headline chasing media parsing every word and nuance the market took the Fed to be unsupportive. President Trump hasn’t helped either with “tariff man” tweets, a government shutdown, and emerging (again from headline chasing media) threats to sack Chair Powell. We need volatility to settle and asset prices to stabilise otherwise its trading a risk averse market as the best style of play.

Here’s the full PDF

And don’t forget I’ve put forward this little piece on How To Make the Best USe of Your Platinum Scan
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 Content – Cross Asset analysis and Chart scan December 22 and 23 2018

Understanding Your Weekly Platinum Scan

on December 21, 2018

Understanding the Weekly Markets Scan

Each weekend you will receive a pack from me which I’ve called the Platinum Weekly Scan. The Scan uses individual technical analysis using my process within a broader cross-market analysis.

What is cross- market analysis?

You may wish to trade just the Aussie dollar, the Euro, the DXY, Gold, WTI, the FTSE, SPI 200, Hang Seng, Walmart or Anglo American.

And you can trade them successfully just by concentrating on them and knowing them intimately. But part of knowing them intimately is you’ll need to know the key inputs into and drivers of the currency, commodity, index, company, or market you are trading.

That there is cross market analysis – you are understanding the interrelationships of the key drivers.

Now scale out to a macro level and the same type of multi asset and cross market analysis is used to understand what’s going on in markets more broadly.

But because it’s across a broader spectrum, interrelationships are both more complex and more variable. But it is in Cross market analysis – looking at the interplay of economics, geopolitics and news across and between foreign exchange, bond, commodity, stock, and credit markets – where the trends and drivers of same emerge.

It helps traders be both better informed and better prepared.

Rates and Bonds drive currencies, currencies drive commodities, commodities drive stock values, stock values drive index returns, the economy and central drives rates and bonds….and so it goes in an ever evolving milieu of cause and effect.

Cross market analysis tells you what’s really driving markets and how to profit from it.

Working through the sections of the Weekly Pack

Key takeaways

This is the last thing I write each week. It is the high level summary of where things fit after doing the chart scan, the correlations, and the individual technical analysis on each of the assets.

The Daily and Weekly Chart Scan

This is a high level summary of the key price and some technical levels to watch across the markets I’m looking for the scan.

Price, trends, MACD, moving averages, and Turtles (both daily and weekly).

This is my go to screener of the charts I watch closely on both the Weekly and Daily basis. And it is also an indicator of direction and levels to watch – also an indicator of the safest direction to trade when trends line up.

Last – just the last price

Trends – ShortTerm (4-11sma), MediumTerm the JimmyR (15-30ema), and LongTerm (50-200sma)

MACD – 15,30. (Not 12,26 – see JimmyR)

Moving Averages – as is

Turtles – Very simplistic possible break out (HH and LL20) and Stop Loss/Take Profit (HH and LL10) levels

This page tell you where the trends are and where the levels the trends may stall, accelerate, or reverse are. 

Correlations for better understanding cross market analysis

It’s easy to say an asset price is driving the price moves of another asset anecdotally. But not only could that anecdote be mathematically be wrong, relationships aren’t stable and correlations cycle through time.

What the correlation analysis does is give you an indication of what is driving what markets and what that might tell you about sentiment and future direction of a single or multiple assets. Take a strong correlation between Stocks, Gold and the Yen – that would tell you risk is either on or off. It’s a stylised example but as the correlations move you can see the markets narrative writ large.

The different colours in the chart above represent the different markets

Light Blue – Currencies with Currencies

Light Green – Currencies with Stocks

Grey – WTI Crude Oil with Currencies

Watermelon – AUDJPY with Stocks

Yellow – Gold with Stocks

Bone – Stocks in the US with Stocks globally

Dirt Red – Bonds with Stocks

This framework is performed on 20, 35, and 95 day basis so I (we) can see current drivers and how they have or are cycling. It helps inform the overall backdrop which then feeds into the overall key takeaways in the weekly note and also

The individual charts

Each weekend when the market is closed I look at the Monthly, Weekly, and Daily charts to get the Long, Intermediate, and immediate outlook for the markets covered.

The base level of markets I look at is:

FOREX – DXY, EUR, JPY, GBP, AUD, CAD, NZD, CNH, SGD, EURJPY, EURGBP, GBPJPY, AUDJPY, AUDNZD, EURAUD, GBPAUD

COMMODITIES – Gold, Silver, Copper, WTI, Brent and Bitcoin

BONDS – US 10’s

STOCKS INDEXES – S&P 500, DJ 30, NASDAQ 100, SPI 200, DAX30, CHINA A 50, FTSE, Nky 225, HSI

I also look at other markets and relationships as they become important or influential.

The Analysis framework

At the top of each chart you will see the close of the week an last weeks close (in brackets). You will also see the direction of the daily and weekly MT trend (JimmyR) as well as the MACD

The analysis frame work is through a combination of my system (MACD, Stochastics, 15 and 30ema’s) together with trend lines and Fibonacci.

Fractals, 50 and 200 period ma’s are on the charts but not integral to the analysis framework.

The takeaway at the top right above the monthly chart is my high level thought on the asset.

Wrapping it all up

Once I have gone through this exhaustive process – I then synthesise this back into the key takeaways for the pack and it also helps inform my daily newsletter writing and video.

For example this framework enabled me to see the stall in bonds rates rising and the foll over in stocks to see the funk coming back in October 2018. After a few months or what felt like very boring Saturday’s of putting the pack together the framework paid off and this is what I wrote to myself – it was only me an a couple of mates who got the scan then, hence the handwriting.

Notice the set up in bonds didn’t actually follow through. But that too has been a very valuable signal as the sentiment and market shifted.

But as highlighted these insights aren’t going to happen every week. The aim of Platinum is to see the turns and the shifts coming and prepare for them. Both in a macro sense and then individual market or asset sense.

PLEASE FEEL FREE TO DROP ME ANY THOUGHTS, QUESTIONS, OR IDEAS. this is a product that essentially I built for me but share with you. It’s not set in stone and will evolve to my and your needs. 

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Greg MckennaUnderstanding Your Weekly Platinum Scan

Platinum Content – Cross Asset analysis and Chart scan December 15 and 16 2018

on December 16, 2018

G’day folks – Welcome to the Weekly Chart Scan

Welcome to the first full chart scan I’ve released into the wild.

This is something I have been doing for myself for a very long time and sharing with a few close colleagues. It is my go-to document. It’s helped me get so many big shifts right in 2018 and over the years. The point – like my dailies – isn’t that something earth shattering will emerge each week. But in taking a deep dive in cross-asset market analysis on the weekend when markets are closed I get a chance to see the signal amid the noise.

Now, this was built by me, but it is for you now too. So please feel free to reach out and give suggestions, thoughts – brickbats too, they are part of the learning process – so I can refine this into the kind of go-to document for you that it is for me.

Cheers and thanks,

Greg

Here are the key takeaways from this week’s analysis

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Greg MckennaPlatinum Content – Cross Asset analysis and Chart scan December 15 and 16 2018

A Time For Caution…

on December 7, 2018

Special Report

A quick note on market volatility

There is every chance that the move in the ES (S&P 500) futures which saw the price drop from ~2712 to ~2649 in the space of 3 minutes in US night trade, early Asia was just a fat finger trade. Or more likely, as we saw in the Sterling flash crash a couple of years back, an Algo gone awry.
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adminA Time For Caution…