Bitcoin BTCUSD With Jeremy Clarkston making “Who Wants to Be A Millionaire” viewable, utter shock was experienced losing £32,000 hypothetical pounds when getting an answer wrong! The reason; being 100% certain Pioneer 1 visited Mars while the Viking space probe did Venus & Saturn, with the idiot on TV walking into the trap, saying “Viking”. Except, of course, for a tiny little problem ; my 100% certainty was utter tosh.
Thankfully, this sort of nonsense rarely translates to
our attitude against prices as we’re able to constantly weigh forces, usually
able to make a reasonable bigger picture decision with a fair chance of
accuracy. Further to our report in September, Bitcoin indeed tumbled to 9218 and
in the period since, has hovered above our secondary longer term target at 7220.
So far, the closest achieved has been 7665 dollars, visually giving an
impression it may be “close enough” to bottom, if any real strength is apparent.
We’re not entirely sold on the idea, thanks to the BLUE
downtrend. It suggests Bitcoin presently requires exceed 9900 before we dare
start to trust any rise. The reason is fairly painful as weakness now below 7665
indicates expected travel to an initial 7220 with secondary, if (when) broken,
now at a long term 4,900. Despite such a secondary sounding like a substantial
drop, it simply returns Bitcoin to the levels of April this year. In plain
English, the forces against Bitcoin, even though it has not achieved our 7220,
remain down at present.
To give an indication any rise my prove genuine, the price needs above 9534 as this apparently calculates with an initial ambition at 9955. If exceeded, secondary calculates at 11745, along with almost certain hesitation.
#SP500 #JAPAN As the clock ticks down (or not) to Brexit, we’ve been considering suggestions on how to trade! The reason is fairly basic, there’s a good chance of market volatility with a bunch of lazy writers quoting trite Warren Buffet sayings. It would be nice to say we already know what’s coming but it’d also be utter bulls**t. While many respected economists are queuing up to do their “talking heads” thing to predict calamity, famine, markets crashing, lack of toilet paper, etc, it’s worth remembering not a single one of them got it right with the crash which culminated in 2009, a crash we still feel the effects of.
It’s possible, if these clowns are predicting chaos, we
should actually anticipate the opposite, should Brexit actually happen.
One thing is certain. Even if there is no chaos, the
market will invent some on Brexit day as wild swings will be the immediate
fashion. Of course, the reason for wild swings is rather less glamorous than
folk like to admit. A game of “trap the stop loss” and “trigger the order” will
commence, effectively meaning STOPS and ORDERS risk proving a really bad idea.
Imagine, for instance, a trader with a cunning plan
which involves Lloyds shares. Visually, there’s a heck of an argument suggesting
this should go up in price, if it only betters 57p. Equally, if it drops below
48p, it’s probably going down. On Brexit day, it would be perfectly feasible for
the price to surge to 57p for a second, triggering the buy order. And at 2
seconds past 8am, it would probably fall below 48p, triggering the stop loss.
So, if the trader had allocated £10K to the Lloyds
trade, they’d lose nearly £1,600 within the opening seconds of the market day.
This is not a fairytale, it happens.
To trade safely at Brexit, if Brexit ever happens,
STOPS are liable to be the enemy and therefore, worth either expanding to absurd
levels or removing entirely. Equally, on the subject of ORDERS, they can prove
dangerous unless opting to chase the absurd. In the case of Lloyds, a buy order
around 30p would make sense. RBS on the other hand allows 142p, perhaps even
100p.
We’ll cover this in greater detail as the month
unravels.
As for Friday, the FTSE is making as much sense as a
Labour politician when asked their policy on Europe. While genuinely preferring
to avoid distain and distrust against any specific party (they all deserve it),
Labour justifying a position where they approve of Europe membership, while
being determined to leave is frankly beyond parody. Even up here in Scotland,
lunatics appear to be flourishing in politics.
At a time when almost 1/4 million Scots marched in
torrential rain, on Edinburgh last weekend for independence (somehow the media
didn’t notice nor did the SNP) and nearly 2/3 of the country voted Remain, it
would be logical to expect the SNP to be working hard to achieve their
independent aim? Nope, their focus appears to be on saving England from its
apparently mistaken belief that Leaving Europe is a good thing. Scottish
politicians seem to be competing with the national football team in achieving
absolutely nothing and being a joke in their own country.
The index closed Thursday at 7197 points and appears to
have set 7225 points as a valid trigger level for any real rise. Above 7225
expects a useless 7235 points initially with secondary, if bettered, at 7309
allegedly. Recent market behaviour has seen rises fail roughly half way to their
secondary and if this is the case again, the index will probably fizzle at 7270
points or so.
If triggered, the tightest stop looks like 7140 points.
The alternate position; what happens if 7140 breaks? We
calculate reversal to an initial 7122 with secondary, if broken, at 7091 points.
We’d add, if the index starts trading below RED, this years uptrend, Boris need
only announce something daft to provoke 7027 points very fast.
#CAC40 #SP500 It’s been some time since we covered this particular #Forex pairing, something of a surprise as we’d generally been quite spiteful about the Force India Formula 1 outfit. Thankfully Farce India are no more, the team taken over and renamed Racing Point and still based at Silverstone.
The Rupee / Sterling relationship needs, like so many
other instruments, a glance back 10 years to 2009 as we need make a decision on
the visuals for the intervening 10 years since the last financial tumble. At
present, there are a few alarm bells ringing with this pairing as weakness now
below 86.25 risks reversal down to an initial 83.80. This risks being
significant, again breaking the long term uptrend and risking continued
reversals to 79, should 83.80 break on the initial drop.
It’s probably worth looking at the inset on the chart
below. The relationship was gapped (aka manipulated) back above the ruling
uptrend in August, suggesting the market was perfectly aware the dangers of a
drop.
In this particular instance, despite 79 making a lot of
visual sense as “bottom”, our software insists this scenario should complete at
a bottom of 75.
What if a miracle occurs?
The relationship needs exceed 89.50 at present to
suggest it’s moving out of trouble. This should permit some recovery up to an
initial 94 with secondary, if exceeded, calculating at a longer term 100.
There’s certainly a heck of an argument favouring a pause at 94 but our
secondary ambition looks less possible.
#GOLD #DOW Today, we were late issuing our lunchtime futures! No excuse was given, primarily due to it being utterly ridiculous. The problem started while examining the DAX, attempting to decide whether the growth projection generated had any visual justification. When a large wasp settled on the right hand monitor, it triggered a classic “flight” instinct which saw the glass office door firmly closed with what dignity remained.
Mrs T&T, the official wasp exterminator, was out
walking the dogs and left no option other than to slightly open the door, fill
the office with a killer fragrance any wasp will die for, and go make coffee
while awaiting the monsters death within 15 minutes. At least, that’s what it
said on the label.
Approaching the office door, I was greeted with an
horrid sight. One of our unwanted cats (long story), both of which are banned
from the office, was curled up on a chair, absently watching the wasp patrolling
the sky above it. Spraying insecticide into a closed room with an animal was a
big “no no”, resulting in the absurd situation of waiting until the dogs
returned before regaining control of the office. Futures, along with a
(successful) projection against Germany, were produced an hour late. But on the
bright side, the wasp was successfully squished with a disappointing lack of
drama.
A look at Germany from a Big Picture perspective
appears justified as something is happening apparently. It appears weakness now
below 11,930 point should generate traffic downward to an initial 11,786 points.
While not a particularly impressive ambition, there’s some quite dangerous
potentials if 11,786 breaks.
Such a scenario allows travel down to 11,321 points.
While the visuals indicate some sort of bounce is probable at such a level, we
suspect it will prove short lived as realistically the index will be trading in
a region where a longer term bottom is at 10,192 points. This will break the
uptrend since 2011, leaving the market open to some quite extreme behaviour if
market conditions get really negative.
The Blue downtrend appears to be presenting a sacred
line the market is afraid to cross. At present, the DAX needs above 12,475 to
exceed this trend, launching into a region where 13,650 calculates as possible.
RBS (LSE:RBS) We cheerfully skipped a Sept report for RBS. It ‘successdully’ hit our initial bounce target of 196 and exceeded it, alas fading at 218p, just below our secondary of 220p. We suspect achieving 220p shall prove very significant, if any rise is to be taken seriously.
If we pause for a moment and consider what’s unlikely
to happen, above 220p now suggests recovery to an initial 238p. If exceeded,
secondary calculates at a longer term 282p. We’re pretty far from convinced,
thanks to the visuals. Growth to target levels as postulated suggest a coming
series of “higher highs”, along with the potential of some serious long term
growth.
Like everyone else, we watch the news and “long term
growth” and “banking sector” are terms which rarely appear together!
Surprisingly, RBS share price has now exceeded the long
term downtrend since 2008 and the inset highlights how the share’ closing price
has reacted to this momentous occasion. After a brief surge upward, the rise
faded and visually we believe it intends dribble down to 178p next, probably
carefully above the Blue trend line. If this is the case, 178p should appear
just before the end of this month. The real danger comes with any break below
178p as reversal now to 142p (and hopefully a bottom) calculates as possible.
Failing that, there’s a pretty solid hope it “must”
(aka might) bounce at 100p.
#Brent #DAX It proved one of these “you don’t get out much?” weekends. An issue from living in the Scottish Highlands is lack of variety when it comes to shops. A visit to the mainland gave an excuse for a side trip into a Lidl store. They don’t appear to be listed on the markets or we’d be enthusiastically covering them today.
Never having visited this chain before, it proved a
fascinating jaunt, one which ended with a set of axle stands, an electric
sander, work dungarees, and of course, a packet of wire cutters. Also purchased
was the item which gave an excuse for a visit, cheap peanut butter for the dog
(an easy way to sneak medication to animals). Getting ready to give our little
red tractor its annual service, this exquisite Aladdin’s cave of useful junk
provided an excellent starter with the prices of the non food haul quite
extraordinary. Hopefully the axle stands don’t collapse while I’m lying under
the tractor arguing with its clutch!
Something else, also important, happened in the last
few days.
The chart below has a little circle though the DOW
JONES uptrend for 2019. We’ve also shown the movement as an inset as we fear
it’s liable to prove important. This sort of thing we refer to as a warning
sign, a clear signal an important trend can be broken. Often, when this sort of
thing occurs, any movement below the trend is usually sharp, fast, and painful.
At present, the implication is we should use 26,078 as
final straw.
Essentially, weakness on the DOW below this level is
liable to provoke sharp reversal down to an initial 24,867 points. If broken,
secondary is a longer term 23,536 points. Generally, these circled trend breaks
imply reversal should occur due to some sort of negative news and worse, if our
initial target is achieved, ultimately there’s a heck of an argument favouring
“bottom” at 22,206 points eventually. In terms of the important question, “If I
go short, where’s the stop?”, the answer is pretty straightforward; as tight as
possible. The drop, if it happens, will tend not form part of a trading cycle.
What’s surprising about this scenario is the suggestion the market could be poised to reverse all movement during 2019 and ponder if Mr Trump is planning to Tweet something outrageous in the weeks ahead. Who knows, maybe he shall announce his undying love for the UK’s Mr Johnstone, just before executing a ban on all trade with the UK…
All kidding aside, there is ‘something’ about the DOW’s
movement in recent month which, if it were a share price, would leave us
uncomfortable.
To get out of trouble, the DOW need only exceed 26,630
to give the first hint we’re being panic merchants. As it closed last week at
26,573, it’s not a big ask.
Above 26,630 is supposed to trigger movement up to an
initial 27,076 points. If exceeded, our secondary is at an amazing looking
28,285 points and the territory of new all time highs. The first major
challenge, of course, shall be the question as to whether sufficient strength
exists to achieve the 27,076 level. If it does, the circled break below Red
shall be consigned to history as a false alarm.
#FTSE #Nasdaq Despite the nation being notorious cheats (at sport) Australia, boasts a stock market which pretty well plays by the rules. Unfortunately, the last few days saw the market climb to 6850 derailed, probably just delayed, as the rest of the world decided something had spooked the markets. We’re not entirely confident the gates of hell actually have opened.
At times, things felt like; “the Saudi Oil Panic didn’t
work, let’s try something else to slow things down!” This, of course, would be
utterly ridiculous, would it not?
In the case of Australia and its ASX200 index, the
market need only exceed 6555 points (6502 at time of writing) to give the first
suggestion of bottom being “in”. Such a miracle allows a surprise recovery cycle
to an initial 6697 points. If exceeded, secondary is at 6800 but, the big
picture almost demands the market top out at 6850 points.
This is why we like Australia, thanks to the usual
integrity of movements. If the index ever closes above 6850 points, a Big
Picture cycle is expected to commence toward a long term 8825 points!
For now, we shall not be entirely aghast if it finds an
excuse to bottom around the 6443 point.
FTSE for FRIDAY Closing the session at 7078
points, we shall be quite interested if the UK index manages above 7128 on
Friday. This is liable to be significant, allowing recovery toward an initial
7184 points with secondary, if bettered, at 7214 points.
Our emergency commentary in our previous report proved
worthwhile, if somewhat weird. We’d suggested the market would probably bottom
at 7027. For those willing to cross their fingers and enter at such a level with
a Long, we’d proposed a stop down at 6982 points. The market hit our target,
bounced a little, dropped below target, bounced and again reversed to target.
Then bounced properly to 7100 points. All it now needs is above 7128 and we’ll
start to suspect bottom have been achieved – for now.
Remember, of course, the UK has a secret volatile
weapon called Boris, capable of havoc.
Below 6982 points risks reversal in the near term down
to 6950 points. If broken, secondary is at 6900 but to be realistic, it could
drop further to a “must bounce” bottom at 6750 points.
On the chart, we’ve painted a Red uptrend. In honesty,
we doubt uptrends or downtrends for the near term hold any real meaning at
present.