📌 The struggle to claim 14,631 is notable. When studying the waves I came across similar a similar state of affairs in the earlier flows. The impulsive rally derives from its strong nature, not from itself but from much more the strategic concept of portfolio defence. A defensive move which is clearly crowded and starting to become a deer in the headlights could...
With the Chinese economy strongly recovering, and the PBOC being one of the rare few central banks which is not printing like there’s no tomorrow, the outperformance of the CNH is just beginning. USDCNH has closed below the weekly Ichimoku cloud convincingly. Any pullbacks to 6.93–94 will be a good opportunity to get short for a test of 6.70 and below!
The "hanging" candle The problem is as follows: If the only way to reach risk-on in and remove social distancing is either via a vaccine (most preferred option although not really in scope till 2021) or further extreme lockdown measures (as you all know extremely costly and damaging to the monetary side) to completely remove the virus from circulation. With...
The markets continue to grapple with the immediate effects of the Coronavirus. The second wave in pockets of the world has forced cities to take active measures to control the virus. Melbourne, Australia has gone into a secondary lockdown while Florida and Los Angeles see cases surge, with the Mayor of Los Angeles stating that the city is “on the brink” and a...
Buyers made the completion of an ABC corrective sequence to end the move with today's NY session. Europe are now leaving their desks with defensive superiority at the 70.2x highs. Next comes a test of the lows as the next customary inventiveness of swings across risk markets enters into play. The promises of a vaccine any time soon sadly look like unicorns,...
NZD is moving as collateral with AUD, those following the previous AUDCNH idea will know this is no less imaginative. New Zealand is exposed to a short-circuit in Chinese supply chains leaving it vulnerable to a slowdown in China via coronavirus. On the monetary side, RBNZ has been notably quiet around the impact from the virus. The CB will not be able to hide...
A bloodbath across most of Asia with SHCOMP managing to hold via PBOC intervention. Actively sold the Tokyo close as red alerts have been triggered across Global EQ Index. Those familiar with the current technical flows we are tracking will remember the PBOC dip; it was a classic example of CB intervention in attempt to stop the bleeding. The issue is that...
A major breakdown ahead of the open as markets catch up to the virus disruptions. AUD and global trade are set to suffer for sometime, it will take a brave man to step against this flow. On the monetary side, RBA tee'd up a rate cut in April with another in Q3 on the cards. Housing has already done the heavy lifting, will need A LOT more help from elsewhere to...
Here we go for a round of important chart update on the FX, Commodity and Equity board... I do not subscribe to the idea of this being the start of the euro reserve currency rally which we were tracking earlier in the year that failed from the Coronavirus short-circuit, although it is certainly moving with speed. Remember we have month end flows in play now too...
I apparently forgot the #1 rule in investing that has remained true since the financial crisis: don't bet against global central banks and their ability to maintain economic(stock) expansion. The PBOC has injected enough liquidity during this coronavirus outbreak to ease all trader fears of a market decline which has led to price filling the gap that was created...
On the technicals there is little to update while the resistance holds, despite the bounce via PBOC intervention on coronavirus risk flows. The only level in play to the topside is 7.0248 as it caps the highs in the current wave. Anything above will unlock a leg towards the next barrier at 7.0733. The coronavirus short-circuit sadly temporarily disrupted the...
China returning from LNY and an (un)lucky -8% selloff taking the headlines as SHCOMP catches up to the bleeding across Global Equities since last week. Well done those that caught the move we traded live here: A flawless -8% leg in a single gap; as long as the full extent in the impact of this virus remains unclear it will be difficult for SHCOMP to get back...
Bulls now have a solid position, since the opposing break is sellers biting on granite!! The lows cannot be broken, here we are tracking spillover risk-off flows from PBOC in USDJPY, Gold and SHCOMP in particular; Firstly USDJPY : Secondly SHCOMP : Bulls now on the one hand wants to trap sellers but on the other hand wants to load as much as...
An important update to the CNH chart after the latest coronavirus measurements and impact calculations. PBOC stepped in as expected to stop the bleeding and SHCOMP ending the day with a lucky -8%: In the FX market, the impact will show over the coming sessions as demand for CNH increases with capital rushing to the doors. This is not a healthy technical...
Here we can focus on the realms of reflationary risks that are around the corner, the struggle to shake out bulls is identical to the struggle we saw in 2016 which is reassuring, and for that reason our problem is reduced to a timing issue. For those tracking the previous diagrams in Gold it is obvious in USD terms both on the Weekly and Daily. Weekly: ...
Here we go with an update to AUD as we enter in 1H20. Consumers remain the key to the flows here, in my books markets overpriced odds of another cut from RBA in Feb 2020 ahead of income tax cuts in the middle of the year to stimulate the recovery. After RBNZ surprise hold in Q419, NZD was able to sustain a strong bid. After AUD unemployment came in better than...
In a nutshell, I am expecting Copper to keep Chinese Equities afloat and recover Q120 with less uncertainty via fiscal policy and a rebound in exports. For those following the latest Hang Seng / Copper chart: For the macro side, CNY will find a strong bid via trade tensions easing as we move into 2020 US elections. China's outlook for future generations is...
A good time to update the CNY chart with US away from their desks for thanksgiving. Both sides rolling back tariffs means that CNY has unlocked the gates for a retrace towards the key 76.4%. On the monetary side, updates from PBOC who continue sitting on the bid and are unlikely to change stance and keep CNY strong against the crosses, and as long as this...