Trends and Targets for 09/10/2018

Banks, Brexit, Banksy & Pink Elephants. The Retail Sector know a sure fire way to galvanise trade is to change things around. At TaT, one of the team tells a story from the 1980’s, when he bet he could sell 100 Pink Elephant soft toys in a week. By changing display priorities in his petrol station, it became Pink Elephant hell with the oversized monstrosities selling for 10 quid each. He had paid 2 quid.

Within a week, the shelves returned to normal, the bet won. But a lesson had been learned with the result that particular retail outlet seldom remained “normal” thereafter. Nowadays, it’s a large M&S convenience store with petrol pumps, probably struggling to attain the same level of retails sales once achieved which, for the 1980’s, were truly stunning. He turned down two Concorde freebies from suppliers, sending staff members on the USA junkets.

Despite the constant barrage of misery from the UK media, we’ve a growing suspicion Brexit Armageddon may prove a disappointing disaster, utterly failing to fulfil prophecies of doom. Instead, it may prove the UK’s Pink Elephant moment and it’s possible some benefits already are appearing. The agriculture industry, used to importing cheap seasonal labour from Europe, are complaining about increased wage rates to attract local UK workers. By employing local people and paying a reasonable wage, the money remains within the UK and able to buy garbage like soft toy Pink Elephants.

The fly in the ointment, as always, is the financial sector. Despite our in-house optimist suspecting Brexit will prove useful for the countries future, we’re really struggling with the UK’s Retail Banks. Unlike Retail petrol station shops, they’ve tried about every trick in the book and according to logical trend progression, a pretty grim future threatens Retail Bank share prices. We’re quite literally confounded by Lloyds Bank now signalling the potential of 5p as share price bottom, a prediction we’re the first to admit as absurd.

After all, computers literally don’t know a thing… They just follow program trends!

The big questions are; will Barclays hit 70p, will Lloyds hit 5p, will RBS hit 212p? Will the banking sector index permit this?

FTSE:NMX8350 is the sexy designation given to one of the worlds most important indices and at present it’s looking pretty grotty. Weakness below 3960 (at time of writing, trading at 3965) allows travel to an initial 3696 points. Secondary if (when) broken calculates as a bottom of 3236 points. Quite amazingly, the secondary target matches the uptrend, sometime around the start of July 2019 which is essentially when Brexit hits the fan. As a result, 3236 is liable to become a pretty important number.

What this means for the Retail Banks is fairly simple. Rather than our dire calculations, a drop such as this indicates somewhere around 230p as a bounce point on RBS, Barclays a touch more confusing at 140p, and Lloyds calling it quits around 32p. If this indeed proves the case, will share prices landing on a pile of pink elephants actually bounce?

If our retail “good shake up” analogy proves correct, probably yes. But we’d tend expect any initial 20% bounce from these tragic target levels to prove short lived as the market will demand reality worth a glance for the longer term.

And to mention the converse, NMX8350 requires better BLUE (4330 at time of writing) as this would confirm we’ve wasted your time reading this. You can do a Banksy and shred the article!

Chart goes here

FUTURES

Time Issued

Market

Price At Issue

Short Entry

Fast Exit

Slow Exit

Stop

Long Entry

Fast Exit

Slow Exit

Stop

Prior

9:27:35PM

BRENT

83.78

‘cess

9:31:09PM

GOLD

1188.35

Success

9:35:28PM

FTSE

7270

‘cess

9:40:28PM

FRANCE

5320

5282

5235

5127

5324

5321

5345

5354

5290

‘cess

9:44:53PM

GERMANY

11990

Success

9:50:49PM

US500

2888

‘cess

9:56:52PM

DOW

26522

‘cess

10:01:10PM

NASDAQ

7368

7265

7222

7170

7372

7420

7440.5

7499

7302

‘cess

10:06:04PM

JAPAN

23620

‘cess

 

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