#Brent #DAX #FTSE There’s something almost horrific about the words “Underlying Health Condition”. Even at this early stage, the media opt to slide the term in, following news of a Covid-19 death, obviously sending the comforting message – ‘you’ll be okay’ to the rest of the populace. Have gone through chemo in 2019, this writer enjoys an “underlying health condition” thus, is concerned. A lingering cold since Xmas gives a reminder of the strength – or otherwise – of the immune system.
We’re going to focus on the FTSE
daily while this volatility remains as it certainly has an underlying health
condition. Our report on Friday proved pretty concise, the market opting to
march up to the top of a hill, then march all the way down again. It closed the
day at 5323 points.
Weakness now below 5237 should
anticipate reversal down to an initial 5136 points. If broken, secondary now
calculates down at 4948 points. This is obviously pretty dangerous, tending
confirm the risk of longer term reversal down to the 3,000’s. Unfortunately, the
tightest visual stop loss level in this scenario is absurdly wide at 5404
points.
Above 5404 is supposed to generate a
lift to 5444 points. If exceeded, secondary is at 5503 points. We have our
doubts.
Finally, always remember we are
discussing The FTSE during trading hours, not FTSE After Hours Futures.
#DOW #Gold #FreeFutures We really hate sounding like panic merchants. Our commentary last Friday showed 5,260 on the chart, a number we felt worthy of display but we didn’t bother explaining the rational in the analysis. So, a drop of 1,467 points in a week saw the market close Thursday at 5,237 points. This is known as ‘ headless chicken’ territory…
What next, given the UK market closed a session below a major target level?
Rather surprisingly, we suspect some
sort of rebound must be on the horizon, if only to allow the market to gather
sufficient weight for future reversals. But we’re pretty far from confident any
rebound will “stick”, given the FTSE is now trading lower than any point since
2012. We should probably abandon our inherent caution, instead adopting similar
levels of misery to that adopted by a TV reporter interviewing a doctor.
The Big Picture now suggests weakness
below 5237 should bring travel down to an initial 4969 points with secondary, if
broken, at 4368 points. In fact, secondary could find itself at 3944, thanks the
the market being manipulated downward at the open recently. Visually, there
would normally be ample reason to hope for a rebound around the 4969 point but
experience during March (hasn’t this been a long month!) constantly warns the
only thing to expect is disappointment.
The market has been forcing the
market down quite firmly!
This absurd suggestion comes, thanks
to movements made in the opening second of trade. On the days the market was not
actively forced downward at the open, reversals experienced were ‘only’ 60 and
70 points respectively. On the other two days this week, the market itself
forced prices down at the open, creating an environment of panic. It’s certainly
quite sobering to reflect on market reversals being caused by the market itself,
perhaps taking advantage of an epidemic to maximise on a climate of fear.
Should the FTSE now manage below 3944
points, we’re looking at eventual reversal to a bottom (hopefully) of 3171
points. If achieved, this will be lower than 2009 and also, the crash of 2003.
Near term, we’ve a slight suspicion
some sort of bounce may occur, so we’ll focus on recovery scenario first.
Above 5311 points is supposed to
provoke recovery to a useless 5345 points. If exceeded, our secondary calculates
up at 5427 points. And given the pace of descent, we can give a third target
level, up at 5549 points, effectively the level the market stabilised for most
of Thursdays session. If triggered, the tightest stop is at 5237 points.
Even for near term reversal
potentials, we suggest looking at the Big Picture scenario above. Things are
moving fast.
#Nasdaq #France Kimberly-Clark, owners of Andrex (the UK’s favourite toilet paper), must be laughing all the way to the loo, given UK public’ behaviour in response to CoronaVirus. Unsurprisingly, it looks like it shall need more than this countries irrational behaviour to save NYSE:KMB from being flushed. But first, some bumf.
It transpires the term “bumf” dates
back to Victorian times, the word shortened from its original “bumfodder”. Which
was the original name for toilet tissue. Thankfully, the word hasn’t strayed far
from its roots, thanks to the vast levels of bumf received prior to the UK’s
recent general election, materials still used to light the log fire!
As for Kimberly-Clark share price, it
looks like weakness now below 131 should drive reversal to an initial 125
dollars. If (when) broken, we suspect it shall bottom at 105 dollars and
hopefully rebound.
France, the CAC40, is looks a bit fraught. We last
covered it in August 2019, giving criteria for reversal to 4728 points. It
finally triggered reversal at the end of February and since has been
pretty much as expected, if rather fast. The index has now closed 3 sessions
solidly below target, so we must dwell of downward potentials for the future.
The immediate situation is fairly blunt, the index
requiring above 4990 points just to regain the prior uptrend… With the
strength of downward commitment, we have our doubts. Instead, it appears
weakness now below 4600 should bring reversal to an initial 4533. We’d hope for
a real rebound at such a level as the implication below is quite dreadful. The
secondary calculation comes in at 4358 points, taking the market to a “lower
low” (yes, we’re getting fed up writing this) and placing the French index at
risk of continuing downhill in the longer term to a bottom of 3094 points.
Of course, given the pace of recent reversals, “the longer
term” could easily mean sometime next week!
#FTSE #Japan Given it’s ‘amateur dramatic week’ for the price of Crude, a few emails reminded it’s worth a glance at Shell’s future price potentials. When we last reviewed them (link) we provided a scenario for 17 quid or less. Obviously, the share price has fully embraced these potentials, relaxing severely but curiously, there is an argument for a rebound.
Recovery anytime soon above above
1493p should prove useful, calculating with an initial price target at 1567p.
Oddly (for us), despite this movement potential being rather trivial in the
grand scheme of things, it’s a scenario we’re pretty comfortable with. Things
become a bit more vague above 1567p as our secondary target works out at 1758p.
Presently, all the secondary does is give hope for an attempt at the immediate
downtrend (Blue). Only with price closure above this line dare we express
sentiment of “proper” share price recovery commencing as we’re able to give 2239
as a third level target.
At time of writing, Shell are trading
at 1371p and we’d now be inclined to alarm, if any excuse is found to drill down
below 1243p. Movement such as this is liable to trigger reversal to an initial
1094p with secondary, if broken, down at 834p. Visually, the secondary
calculation is absurd but unfortunately, so was our calculation yesterday which
provided a drop target for Brent at 15 dollars.
Sometimes numbers, like politicians
salaries, can be absurd. And unlike politicians salaries, they don’t have to be
wrong.
#Gold #SP500 The markets are producing movements never before experienced. We’re more than a little concerned as despite any possible near term rebound, an awful lot of triggers were demolished which permit further weakness into the realms of doom. Brent proved a case in point. Our last report had $39 as “bottom”, a number which was ignored when the market gapped the price down at the open of trade, the day starting at 37.5 dollars before trading even commenced.
Equally, Gold is supposed to be a
defensive commodity, we’d guess the metals density making it useful to hit
anyone suspected of carrying Covid-19. Gold, thus far, has avoided making
serious panic gains above the 1700 level. Perhaps Toilet Paper shall prove to be
the new Gold, if panic buying is a reliable indicator!
The price of Brent is a certain concern, gapped down to open the week at 37.50 dollars. Usually we’re able to back test this sort of thing in an attempt to find a trend we’d previously missed. Unfortunately, on the occasion, we’re far from comfortable. Crude dropped further than we’d normally expect, now residing in a region with some pretty dire drop potentials.
Just over 4 years ago, Brent hit a
market bottom at 27.8 dollars, a number we’d first mooted when it was trading at
107. And to be honest, while we mentioned the potential, we also ridiculed it,
thinking the potential highly improbable. This time, we’re not being as
cautious!
The situation now calculates with weakness below 31 dollars allowing reversal to an initial 25 dollars. If (or doubtless, when) broken, our secondary works out at a bottom of 15 dollars. We believe, if 15 dollars ever makes an appearance, Brent must bounce. Several reasons support such a theory. Firstly, since 2016, three quite distinct scenario now allow an eventual bottom of 15 dollars. Secondly, we cannot calculate anything below such a level.
Shown on the chart below is the immediate downtrend, suggesting the product price needs almost double to 60 dollars to rejoin prior trends.
Perhaps of greater concern should be the proposed target levels, each below the markets prior disaster level of 27.8 dollars. The implicit suggestion therefore is the best we can hope is an entirely new trend shall develop in the future, one which will find difficulty taking the product to prior levels.
Unless, of course, something happens
in the world and proves able to change the perception of “demand” for crude oil.
We’ve not bothered writing "success" against each index.
While all drop targets were achieved, it was due to the markets being gapped
down at the open. This sort of thing never feels like a win.
#Brent #DAX Virus fears certainly appear to be fouling airline share prices but it’s perhaps worth mentioning neither IAG nor EZY are yet trading in a zone where panic makes sense. They’re both certainly pretty close to messy, their prices not yet entering the official “lower low” flight level to misery.
However, we’ve decided it’s probably
best not being flippant about Coronavirus. News coverage now pollutes every
single section of Google News – World / Local / Sport / Business /
Entertainment(?) / Politics, Tech, even Science!
It’s doubtless fair to assume folk
will prefer avoid spending any time in flying Petri dishes while panic levels
remain high. This will surely create an ongoing income problem for the travel
industry, making it easy to believe the drops since February 20th may simple be
early warning of trouble. If this proves the case, weakness against IAG below
394p risks proving messy, signalling the risk of further reversal to 334p. If
broken, secondary calculates down at 222p.
Despite being a truly shambolic
reversal suggestion – a 50% reduction on current – this risks not being the end
of the story as “bottom” works out at somewhere between 100 and 138p ultimately.
At present, there is very little
point in drawing a trend line to map the pace of reversals. Were we to do so,
about the best we could suggest is of moves above 550p signalling the drop has
slowed. In reality, any recovery is liable to prove sharp and vivid, if someone
announces they’ve knocked together a cure for Covid-19 in their garden shed! But
to be fair, we’d tend believe above just 462p will give sufficient early warning
for price recovery.
#FTSE, #DAX, #DOW Few things are as enjoyable as having an entire swimming pool to yourself. A lingering cold ensured a visit to a local fitness club and its pint sized pool was avoided. Finally couldn’t take it any more, visiting during Thursday afternoon. An hour of peace and quiet, none of the regular “walrus” swimmers breast stroking their incessant lengths. Better still, the childrens pool was also empty, no mothers and screaming babies. Being alone on a racing circuit or ski slope gives similar levels of confidence, the realisation the only person to compete with is yourself.
And perhaps more importantly, no-one to see you foul up royally!
And then the penny dropped.
A virus with the name Covid-19 is
already stopping people congregating, folk doing it quietly without fuss.
Chatting to the pool staff, visitor numbers are apparently reduced, the
suspicion being customers are simply taking sane precautions. This is in Argyll,
Scotland, literally one of the least populated parts of the UK, traditionally
the last place to declare General Election results. This is due to bad weather
stopping helicopters bringing ballot boxes from the islands. Once, the
predecessor of Royal Mail experimented with firing mail by rocket across some
sea narrows. At this time of year, we’re not exactly tripping over tourists and
a virus will need work hard to spread.
There had been a quiet boycott of a
Chinese takeaway, thanks to the place shutting for a week for the new year. The
owners returned from visiting their family, discovering a sharp drop in trade
thereafter. Eventually, a local social media campaign got the message across
they’d only been visiting family in London and not HK, thus trade started to
return.
Of course, this prompted the
question. How are things over on the mainland?
At present, financial volumes through
London are pretty useful, broadly speaking up 50% from the same period last
year. The Brexit Hiatus shall forever be ingrained in memory and we’ve been
seeing levels of trade increase, since last Decembers election brought what
passes for clarity.
To focus on dangers, the other day
the FTSE hit 6460 and bounced. We’re tending regard this as pretty significant
as the real danger now points at weakness below this level now calculating with
an initial 6243 points with secondary, when (not if) broken at 5858 points.
These “big picture” numbers are broadly similar to our last set of calculations,
suggesting the pace of movement has stabilised over the last few sessions –
despite some utterly mad swings.
Another detail, one we’re not
comfortable with, has been the behaviour of the FTSE in relation to RED on the
chart. Last Friday, the index closed below the trend, a faux pas rapidly
corrected. We shall be extremely alarmed now will closure below this level,
presently at 6685 (roughly).
Nearer term, the FTSE is as
complicated as usual. Weakness now below 6656 looks capable of reversal to an
initial 6615 points. If broken, secondary calculates down at 6533 points. The
other side of the coin comes with movement now above 6724 computing with an
initial ambition at a useless 6743 points. In the event its exceeded, our
secondary works out at a more interesting 6818 points.
