Trading with point and figure

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got some

 

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close up

 

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in rez

 

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excellent stuff

 

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Mornin folks

 

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SPX into the open...tricky

 

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DAX into the open...even trickier

 

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why..?? cos we do not know if there is a break of that uptrend

 

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no break on these inputs

 

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change to hilo plot...there is a break of minor trend

 

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supp

 

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Good Morning: The Long & the Short of it and The Bigger Picture - 21 March 2019 - ADM ISI


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Ostwald, Marc
08:55 (0 minutes ago)



to Marc






- Digesting 'dovish' Fed as Brexit drama continues; all eyes on EU council
meeting; also digesting NZ GDP, Oz Unemployment, awaiting UK Retail Sales
& PSNB, US jobless claims and Philly Fed; SNB, Norges Bank and BoE MPC
policy meetings; France, Spain and US to auction govt debt

- Brexit: May opts for high risk strategy to bludgeon WA through parliament
at third attempt; EU council Article 50 extension almost certainly
contingent on WA approval; overall situation still hyper fluid

- UK Retail Sales: reactive correction seen after unexpected January surge;
underlying trend likely close to flat
- Norway: Norges Bank set to hike and stick to rate trajectory

- Fed: dovish yes, but tactically allows for a later more effective rate
hike; market already fully priced for current trajectory; still a lot
of unanswered questions about balance sheet despite decision to end QT
in September

- "Morning Call" audio preview:
https://www.mixcloud.com/MOstwaldADM/adm-isi-morning-call-21-march-2019/

- Charts: USD/JPY, US 10 yr yield and Fed rate probabilities

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

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

There is some irony that today is Holi holiday in India & Nepal, Holi being also known as the festival of colours, which according to popular definition celebrates "the victory of good over evil, the arrival of spring, end of winter" - for the time being on the Brexit front, it seems such a celebration would be rather 'premature'. The latter Brexit farce, with the EU council meeting as its focal point for today, seems likely to relegate the rest of the day's bust run of events and data to role of 'also rans'. For the record there are central bank policy meetings in the UK (sic!), Switzerland and Norway, well as Indonesia, Philippines and Taiwan, and the ECB will publish its monthly Bulletin. Statistically there is NZ Q4 GDP to digest ahead of UK Retail Sales and PSNB, US weekly jobless claims and the Philly Fed Manufacturing survey and advance Eurozone Consumer Confidence. France and Spain hold maturity bond auctions, while the US offers 10-yr TIPS. Eminently an ostensibly 'very dovish' Fed will be the primary driver for markets, with the rate trajectory (aka 'dot plot') revised to show no rate hikes in 2019, and just one hike in 2020, which is perhaps the salient point, i.e. the next move in rates is still seen as higher, adn indeed there was no change to the longer run Fed Funds rate estimate from December's 2.8. In other words the Fed is working on the assumption that by taking an easier stance now, in response to the slower economic outlook (NB The GDP forecast cuts for 2019 to 2.1 from 2.3% and 2020 to 1.9% from 2.0% were very modest) it can hike modestly at a later date. As for the balance sheet reduction (QT) programme, it has set an end date of September with a taper commencing in May, which suggests that the balance sheet will be about $3.5 Trln vs. the current $3.8 Trln and a peak of $4.25 Trln. However there are a number of points that will have to be clarified over coming weeks and months, firstly what level of bank reserves is aiming for, secondly what are its plans in respect of the relative proportion of MBS to US Treasuries, and thirdly what are its plans in terms of the average duration of its portfolio of Treasuries and MBS.

** U.K. - February Retail Sales / PSNB **
- UK Retail Sales continue to be very choppy, as is typical around the turn of the year, with the consensus looking for a drop of 0.4% m/m reading following unexpectedly strong 1.0% m/m in January, which would see the more trend representative 3mth/3mth drop back from 0.7% q/q to close to flat. As for the PSNB a further small surplus is anticipated, reflecting the usual late payment spillover from the January tax deadline, and the already documented restraint on govt spending due to the need to sustain the Brexit 'warchest'. All of which is of course is moot given the Brexit related uncertainty which persists. PM May's 'just on with it' because the public are fed up with parliament's indecision is eminently a high risk one, underlining just how stubborn she is, and hardly the best way to try and get her Withdrawal Agreement 'over the line' at the third attempt, but then again she may well see the situation as one in which she has nothing to lose (presumably she is resigned to being unseated as PM in the not too distant future, though she is clearly not offering this as a quid pro quo for approving the WA). That said, Corbyn flouncing out of the cross party meeting with May yesterday evening underlines just how useless the opposition is. But for today, the question is how the EU council responds to the extension request. The working assumption is that it will be contingent on approval of the Withdrawal Agreement, and constrained until the May 23/26 EU parliament elections. In terms of outcome probabilities, it would seem that there is a roughly 50/50 chance either of May's deal being approved or a 'no deal' Brexit - that said this remains a very fluid situation, and it would be remiss not to expect further sharp twists and turns over the next week. In passing, a reminder that unless the WA is approved, and/or Article 50 extended, "Operation Yellowhammer" (a series of short-term govt measures to mitigate and respond to any significant disruption that might arise from a "no deal" exit, see https://www.nao.org.uk/wp-content/u...parations-for-exiting-the-EU-with-no-deal.pdf ) will be put into action as of Monday 25 March.

** BoE, SNB and Norges Bank policy meetings **
The BoE's MPC meets today, and with the Brexit farce continuing, and is effectively reduced to the role of bystander, with the only point of interest relating to any further announcements it may make about contingency planning for whatever emerges on the Brexit state of play. Switzerland's SNB has long been expected to remain on hold for the whole of this year. Outside of the usual observations about the CHF being too strong, and its willingness to restart interventions should flight to safety flows prompt unwanted CHF strength, the other point of interest will be its forecast revisions, following a sharp reduction by SECO (govt) last week 2019 GDP forecasts, and a modest tweak down to CPI forecasts. Norway's Norges Bank finds itself in what many of the developed world's central banks would see as a very enviable position, with the latest round of inflation data and a reasonable growth outlook providing a solid rationale for a further 25 bps rate hike to 1.0% when it meets this week. Its rate trajectory will almost certainly continue to signal a further 25 bps rate hike, though with the next move in Q3 rather than in Q4, as it had signalled in December.

 

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supp seems to be holding

 

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sale of tin hats gone thru the roof

 

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should be in mega rez

 

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Mornin folks

 

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SPX into the open
on these inputs...it looks like a brick wall @2870 area

 

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change inputs...still looks like 2870 area

 

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3 moves upwards/Elliot waves..??