Trading with point and figure

Dow in support area now

Screenshot_30.png
 
hello all

looking at the Dow...thought we'd be flying today after the trade war truce but we've just gone down since the big spike up
 
Dax
could be messy this morning
reason..its pulled back into that gap area.as we know"gaps are where no trading took place".Therefore difficult to assess the strength
ps...they do not have to be filled
 
Quiet day for data - digesting Australia Govt Spending & Current Account
and UK BRC Retail Sales, awaiting South Africa GDP - BOE, Fed speakers
and EcoFin meeting; UK sells 5-yr; talking points CNY surge and US 3/5 yr
inversion

- Sth Africa GDP: Q3 rebound expected, but underlying trend still v sluggish

- Charts: - USD/CNY, EUR/CNY & JPY/CNY, WTI oil future

..........................................................................

********************
** EVENTS PREVIEW **
********************

As is often the case, the second working day of the month has a very minimalist data schedule with just the overnight UK BRC Retail Sales and Australian Q3 Current Account to digest ahead of South African Q3 GDP. The events schedule is busier, with the very unsurprising RBA no change rate decision to digest ahead of testimony from Carney on the BoE's Brexit assessment, speeches by BoE's Vlieghe and NY Fed's Williams, and a regular EU EcoFin meeting, and in the EM space there are rate decisions in Botswana, Chile & Kazakhstan. Today also sees the meeting of German auto sector executives (from Volkswagen, Daimler and BMW) with Trump administration officials. A reminder that the US Treasury market will close early today, ahead of tomorrow's national day of mourning for the late President George HW Bush (tomorrow's testimony by Powell has been postponed and the release of the Services PMI & Non-manufacturing ISM pushed back to Thursday). The UK holds the first of two Gilt auctions (2024 today & 20-9 on Thursday) this week to help absorb the usual hefty flow of coupon payments on December 7. In respect of South Africa's Q3 GDP, the consensus looks for an SAAR 1.6% rebound from Q2's -0.7%, which would see the y/y rate remaining very weak at 0.5% vs. Q2 0.4%. The rebound is likely to have been led by personal consumption and agricultural output, though mining output is expected to have been a drag. Thus far it would also have to be noted that the measures to prop up the ailing economy by the Ramaphosa govt are very unlikely to give much of a boost at all.

The talking points for the day will however be a) the very sharp rally in the CNY (see various charts), rather belatedly turning a corner that was signalled about 4 weeks ago, and perhaps the clearest signal that China is very serious about reducing trade tensions with the US, and b) the bogus chatter about the 3/5 yr US Treasury yield curve inversion, which the poorly informed will suggest implies the US economy is headed for recession. The fact is that this is primarily being driven by the rise in short-term funding rates ahead of year end (1 and 2-month LIBOR rates rose nearly 3 bps yesterday, and 3-mth LIBOR 1.7 bps), primarily due to the myopic and feckless regulatory regime that is now in place, above all the pressure on banks to hike capital ratios for any client derivative positions that are held over year end.

From Marc Ostwald
 
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