Macro Morning

See the latest Australian dollar analysis here:

Macro Afternoon

By Chris Becker 

Another record high on Wall Street, pushing the risk complex even higher and really starting to diverge from other global stock markets that are doing a better job at discounting risk through the pandemic. No new fiscal measures agreed to by Congress and the White House either, going into tonight’s NFP print, with initial jobless claims coming in slightly better than expected. It’s all about undollars again with gold and silver hitting new record highs while other commodities go nowhere.

Looking at share markets in Asia from yesterday where in mainland China, the Shanghai Composite was looking to put in a loser but managed to rally at the close to finish 0.2% higher at 3386 points, while in Hong Kong the Hang Seng Index reversed its recent advance to be down 0.7% to 24930 points. . This drags price back solidly towards previous trailing daily ATR support as daily momentum remains in the negative zone, so I’m still wary of a new trend until I see a proper through above the high moving average at 25200 points or higher:

Japanese stocks also moved lower, with the Nikkei 225 falling 0.4% to 22418 points as Yen buying sees the correlated USDJPY pair fall. Futures are flat this morning despite the rises on Wall Street with price looking to stabilise here once again at a point of control around the 22400 point level but this market still looks a little weak and unsure of direction:

The ASX200 however was the odd one out, surging some 0.6% to finish well above the 6000 point level at 6042 points. This was despite a stronger Australian dollar but it looks shortlived as SPI futures are down nearly 20 points even as Wall Street makes new record highs. An interesting divergence no? Another oscillation around the key point of psychological control at the 6000 level will continue here, with a new breakout above the 6080 point level required for any definitive upside action:

European markets just don’t want to play catch up with Wall Street and fell across the continent overnight, with the FTSE reversing the strongest following the BOE meeting, while the German DAX ended down 0.5% to 12591 points, squaring off its recent rise as well. The daily chart hangs in the balance with the previous solid one day bullish reversal not translating into anything meaningful despite a big kick from Wall Street – its seems the delusion can’t get across the Atlantic just yet:

Wall Street continues to run on more upside tech earnings/splits and delusion with the NASDAQ up 1% and at a new record high – again – while the S&P500 finished 0.7% higher to 3349 points. The daily chart still shows price not having any hesitation and surging higher, looking nicely overbought ready for the next stage of irrational exuberance – 4000 points?

Currency markets are still against USD with Yuan hitting a new nine month high, while Bitcoin purveyors are seeing the crypto nothing thing move to an almost new yearly high just below the $12000 level. Euro remains steady just below its former high nearer the 1.09 level with momentum having previously getting a little overbought pointing to a bullish bias going into tonights US unemployment print:

The USDJPY pair continues to struggle with Yen buying seeing price remaining around the mid 105’s again overnight. Four hourly momentum is flat lining with a small possibility of a swing short trade building here on further USD weakness, so watch the current session lows for a breakdown:

The Australian dollar continued its comeback against USD, surpassing its previous weekly high above the 72 handle and becoming nicely overbought going into today’s SOMP from the RBA and tonights NFP from the land of the dumb. Support at the 71.70 level has been respected and should provide an uncle point going forward here:

Oil futures were flat with the Brent marker slipping to just above the $45USD per barrel level as the previous breakout turned into a fizzer despite a clearance of daily and weekly highs. The daily chart is still showing a sideways bullish trend but I did warn that the WTI contract had a failed breakout previously that is playing out here as well:

Gold. Yeah well I did say once it breaches $2000, everyone will pile in and that’s what we’re seeing in spades, and in silver too (nearly $30USD per ounce). Looks like no-one wants to take profit just yet, its all about the fear of missing out:

Glossary of Acronyms and Technical Analysis Terms:

ATR: Average True Range – measures the degree of price volatility averaged over a time period

ATR Support/Resistance: a ratcheting mechanism that follows price below/above a trend, that if breached shows above average volatility

CCI:  Commodity Channel Index: a momentum reading that calculates current price away from the statistical mean or “typical” price to indicate overbought (far above the mean) or oversold (far below the mean)

Low/High Moving Average: rolling mean of prices in this case, the low and high for the day/hour which creates a band around the actual price movement

FOMC: Federal Open Market Committee, monthly meeting of Federal Reserve regarding monetary policy (setting interest rates)

BOJ/Abenomics: Bank of Japan, economic policy/direction enacted by PM Shinzo Abe

DOE: US Department of Energy 

Uncle Point: or stop loss point, a level at which you’ve clearly been wrong on your position, so cry uncle and get out!

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  1. Chapter 11MEMBER

    Are the US stock indices at wave 5 on the Elliott Waves, particularly given other indices (e.g. UK FTSE, Dax, Nikkei) appear to be topping out?

    • Janet has said she reckons it’s a wave 5. All I know about Elliot is wave 3 & 5 are the big ones – fwiw.

  2. migtronixMEMBER

    Good time to be a pirate. I still have 100s of oz of silver I bought in 08/09 buried in dad’s yard, gold too but not as much.