Trading with point and figure

Dentalfloss · Mar 14, 2019

Dentalfloss · Mar 14, 2019

First thing to do carve up the chart into bullish and bearish sections using trendlines

Dentalfloss · Mar 14, 2019

use either subjective or 45 deg trendlines

Dentalfloss · Mar 14, 2019

gives you a good feel of whats happening/very quickly

Dentalfloss · Mar 14, 2019

DAX
care with sells/...gotta a very wide supp area

Dentalfloss · Mar 14, 2019

Rez marked

Dentalfloss · Mar 14, 2019

short term

Dentalfloss · Mar 14, 2019

short term supp/rez

Dentalfloss · Mar 14, 2019

add a few pivots to give you some sort of baseline

Dentalfloss · Mar 14, 2019

Good Morning: The Long & the Short of it and The Bigger Picture - 14 March 2019 - ADM ISI

Ostwald, Marc
08:44 (10 minutes ago)

to Marc

- More Brexit parliamentary drama accompanies run of China activity data,
India WPI and UK RICS survey; US Claims, Import Prices and New Home
Sakes, central bank speakers, UK 30-yr sale

- UK Brexit votes: chaos reigns, series of defeats for May suggest total
loss of control, but inadvertently strengthen the chance of WA being
approved at third (or fourth?) time of asking; 'no deal' still on
the table despite vote, and still highest probability outcome

- China: FAI the only bright spot, jump in Unemployment increasingly
the key factor for weaker Retail Sales; drop in Power Output perhaps
exaggerated by extended factory LNY closures, but a poor signal for
Production

- US Import Prices: energy prices to pace expected rise, ex-petroleum
seen weak; New Home Sales seen steady; Jobless Claims expected to
confirm weak Payrolls an outlier rather than signal of drop in labour
demand

- Charts / Tables: GBP/USD, WTI Oil future, Brexit outcome flowcharts, China Public Sector FAI

- Morning Call audio:
https://www.mixcloud.com/MOstwaldADM/adm-isi-morning-call-14-march-2019/

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

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

Aside from yet another round of the UK parliament debating and voting on Brexit, this time on extending Article 50, the focus will be on digesting a very mixed run of activity data from China, which as the stats office chief had flagged ealier in the week generally beat forecasts, along with an unsurprisingly lacklustre UK RICS House Price survey and India's WPI. Ahead lie US weekly jobless claims, Import Prices and New Home Sales, with some central bank speak from Riksbank's Ohlsson and BoC's Wilkins. OPEC publishes its monthly Oil Market report, while the UK auctions 30-yr.

** U.K. - Brexit voting **
- Yesterday's parliamentary voting drama can for once justifiably be termed 'unprecedented', without the accusation of hype and hyperbole being levelled at such a description, above all the irony of the government's unexpected defeat on the vote to stop a 'no deal' Brexit at any time, forcing a u-turn in which it called for its MPs to vote against its own motion to stop 'no deal' Brexit on March 29. Be that as it may, the decision by a number of MPs including a number of senior and junior ministers to 'defy the whip' not only set a much needed precedent of going 'across party lines', per se confirming that May and the Conservative party have lost control of the Brexit process, but it also does NOT take 'no deal' Brexit off the table, apart from anything else, because these were 'non-binding' motions. More importantly all the votes this week remain stuck in the arena of establishing what the majority of MPs do not want, while still not establishing what they DO want. There will of course be howls of protest about the abusing and ignoring the 'will of the people', which is technically and ostensibly correct, but ignores the point that the original referendum did not in any shape or form stipulate what 'leaving the EU' entailed, other than "not being in the EU" - in other words it was profoundly flawed, and as has been all too evident 'unworkable'. This is in any case an irrelevant discussion, as far as establishing what happens next in practical terms goes, which is primus inter pares task of the moment. There still remain a vast array of possible outcomes, and almost no time in which to establish which route parliament will opt for. The attached flow chart graphics from the BBC outline the possibilities. What will be on offer today? First of all a vote on requesting an extension of Article 50 until 30 June, and then a series of indicative ('free') votes to establish what there is a clear majority for in parliament, and form the basis of a request to the EU Council (of national leaders) meeting at the end of next week to extend Article 50, and which will require unanimous approval (there is some irony that former UKIP leader Farage and other hard Brexiteers have been canvassing the 'awkward squad' of populist leaders in EU countries (above all Italy, Hungary and Poland) to deploy a veto against an Article 50 extension (ironic given their eternal chant about EU interference in UK politics). Mrs May being as stubborn, inflexible and resolutely autocratic as she is may well try to resubmit the current Withdrawal Agreement for a third time, in the hope that it will get last minute support from the ERG group and DUP purely because it would at least establish that the UK will leave the EU on 29 March, and despite it being deeply flawed from their perspective. The latter may look like a forlorn hope given that the ERG group is reportedly set to vote against today's article 50 extension, though that could also be interpreted as confirming that they will back the WA to ensure that Brexit does happen on March 29.
As ever the tabled amendments in tonight's vote will require even more attention, as per the precedent set yesterday.

** China - Jan/Feb Industrial Production, Retail Sales, FAI **
- Overall these were disappointing given the optimistic noises that the head of the stats office made earlier in the week, suggesting that the economy had turn a corner in the first two months of 2019. On the positive side, FAI picked up to 6.1% y/y from 5.9% as expected, with Public FAI accelerating sharply to 5.5% y/y from Dec 1.9%, though Private FAI lost traction, dropping to a still solid 7.5%, but well of the 8.7%/8.8% pace seen throughout H2 2018. Retail Sales dropped as expected to 8.2% from Dec 9.0%, with perhaps some irony that there was particular weakness in Furniture (just 0.7% y/y, following a range of 8.0% to 12.7% over the past 6 months, despite Property Investment was reported at 11.6% y/y, the strongest in 5 years. Industrial Production was even more disappointing dropping to a 17 yr low of 5.3% y/y against a forecast of 5.6% and Dec 6.2%, with particular weakness seen in Mining at 0.2% y/y, having seen a range of 2.0%-3.8% in H2 2018, with a drop in power output to 6.8% from Dec 9.9% not sending a positive signal, even if it probably reflected the reported extended shutdowns for the Lunar New Year holidays. Rather more worrying was an even bigger jump in the surveyed Unemployment rate to 5.5% vs. expected 5.3% and Dec 4.9%, reinforcing the pressure on the authorities to enact stimulus measures even more quickly, in order to avoid a further sharp deceleration in consumer spending and the risk of rising social tensions due to the weakness in labour demand.

** U.S.A. - Feb Import Prices / Jan New Home Sales **
- While Fed chair Powell has been very clear that the FOMC is not looking at rate changes any time soon, and will bring its balance sheet reduction programme to an end this year, the market narrative around some of this week's data points amounts to a very acute case of wishful seeing. For example yesterday's run of a marginal miss on PPI (0.1% m/m vs. exp. 0.2%) and better than expected Durable Goods (0.4% vs. exp. -0.4%, Non-defence Cap Goods ex-Aircraft 0.8% m/m vs. exp. 0.2%) and Construction Spending (1.3% m/m vs. exp. 0.5%) was summarized as 'weak data' - which to be frank is tosh and nonsense, the more so given the fact that as much as the Atlanta Fed's GDPnow forecast remains very weak, it was an upward revision from 0.2% from 0.4%. Be that as it may, today's Import Price data are forecast to see a boost from the energy price rebound (0.3% m/m), but to post a 0.1% dip ex-Petroleum, in principle echoing CPI and PPI. As for New Home Sales, these are in principle seen little changed at 623K SAAR, still well off the pace of H1 2018, but well above the H2 average. Weekly jobless claims are forecast to be around their recent average at 225K, and per se serving as a reminder that Friday's Payrolls were an outlier rather than indicating a sharp drop in labour demand.