Macro Morning

See the latest Australian dollar analysis here:

Macro Afternoon

By Chris Becker 

A modest night on risk markets with the NASDAQ slipping again with not much conviction on other stock markets either as the USD strengthened against some of the major currency pairs. Bitcoin made a new yearly high, pipping the $12000 level while silver outshone gold which remains steady after its Friday session falls.

Looking at share markets in Asia from yesterday where in mainland China, the Shanghai Composite was positive but flat before the lunch break, to eventually close 0.7% higher to 3379 points, while in Hong Kong the Hang Seng Index finished 0.6% lower, as negative momentum drags it down to 24367 points. This keeps price well below previous trailing daily ATR support as daily momentum solidifies in the negative zone. Futures are looking a little more optimistic but this downtrend remains baked in:

Japanese stock markets were closed for yet another holiday with Nikkei futures looking relatively solid here on the resumption of trading around the 22500 point level. There is still an overall lack of direction on the daily chart with the point of control around the 22400 point level now turning into an anchor that hopefully will resolve soon, possibly with a breakout above the 22600 level:

The ASX200 wasthe standout as a bank rally claws back all and then some of its Friday losses, closing 1.7% higher to 6110 points.  SPI futures are declining however, down at least 10 points but the daily chart does show some promise now as we head fully into earnings season with some big hitters in the next couple of days. I’m watching for a follow through here above the 6080 point level:

European markets again are directionless with only very modest sessions to start the week, even though they are now being helped along by lower domestic currencies, with the German DAX finishing up 0.1% to 12687 points.  Futures look a tiny bit better but not by much, as last week’s reversal continues to go nowhere although daily and weekly momentum are maintaining positive levels:

Wall Street returned post the NFP print with a relatively mixed session with lots of scuttlebutt over the Kodak deal amongst other issues, including Trump’s executive orders. Overall the DOW and the S&P500 rose, the latter up 0.3% to 3360 points, while the NASDAQ fell back 0.4% in signs its record run is at least slowing down.  The four hourly chart of S&P futures is showing some signs of slowing down as well with momentum diverging back to the just overbought stage, so I’m watching the low moving average for further signs of unlikely but possible weakness:

Currency markets remain in strong USD mode in the main, with Pound Sterling still maintinaing above the 1.37 handle while Euro continues to fall back, almost down to a new weekly low after its Friday night reversal. The next level below on the four hourly chart to watch this week is support at the 1.17 zone as momentum flips negative in the short term:

The USDJPY pair is trying to build some positive momentum as its cup pattern on the four hourly chart comes to fruitition, but still struggling to breakout above the 106 handle in the absence of Japanese trading. I’m watching this level closely for signs of a breakout as momentum picks up:

The Australian dollar remains the weakest against USD, with an unsure start to the trading week following Friday’s bludgeoning, as price heads towards four hourly support at the low 71s.   Support must hold here or we’re likely to see a reversion to the recent lows at the 71 handle proper – watch for any upside at the high moving average:

Oil futures remain relatively flat with the Brent marker pushed up to just below the $45USD per barrel level as the previous breakout remains a fizzer, but still not turning into a washout as price remains above the previous daily and weekly highs. The daily chart is still showing a sideways bullish trend but the failed WTI breakout previously is playing alongside here as well:

Gold remains in a consolidation mood which is to be expected after a big runup, falling back to the $2027USD per ounce level overnight and sitting right on four hourly support here.. The key here for a sustainable uptrend is further retracement, even as low as $2000 to let the price breathe a bit and the next stage to eventuate – but don’t be surprised if it all of a sudden rockets higher again:

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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Comments

  1. This is the last round of reporting where the damage being done by Covid-19 can be hidden or painted in a favourable V-shaped light. False hope all the way.

    • Tend to agree, but probably one more quarter where it will be smooth out to. Q4, and Q1/Q2 ’21 will be telling.

      Bring on the positive MSM news stories about how great retail will be this Xmas (& will save the economy) due to the plebs windfall gainz on the stockmarket/JK/misc nonsense.

    • D I replied to your cartel comment but will repost here
      Re cartels in medicine
      Medicine is a tough one as surgical training is really an apprenticeship with not enough to go around with no one really wanting to be practised on. Simulators and mannequins help but the issue is our new surgeons are very light coming out.
      Many burn out quick and sadly only the real pyschos seem to cope.
      This means Aussie trained spec are thinner on the ground , think they are special and can charge like wounded bulls.
      There was a cartel but been broken to some degree however the new cartel is if you want Aussie trained you pay and if you want the foreigner they can be cheaper.
      We opened the gates to foreign specialists about 6 years ago and its been mixed with less arrogance but its kept alive by the entitled (boomers may I say) few.
      For example robotic surgery is mainly for the sore back of the surgeon so has no advantage and even a slight disadvantage BUT its sold to the punter as being better.
      Hence a letter i saw in the local newspaper
      “I’m disgusted the local hospital doesnt have a robot – my surgeon told me i needed it but I couldn’t afford it so I had it done the usual way….. and its turned out as bad as expected!”
      This is a sad aspect of the mercantility of some doctors here where the sense of entitlement is huge
      I would say do your research and if you ever have something bad with you or yours let me know and I would try to recommend.

      • Funny you should mention it – I have a referral to a spine specialist here in Brisvegas but I really don’t know whether this guy is any good. In any event this brief consultation is costing $300!

        • Jeepers. The answer is don’t be operated on unless very necessary. My preference demographic is a male age 40 to 55 – peak years for spinal surgeons. I’d gravititate to an orthopeadic surgeon specialising in spines rather than a neurosurgeon but it would depend on the issue. If its serious I could get the word on brissie.
          $300! Reassuringly expensive… Sadly how much a doctor charges is not how good they are …its how much money they want to make. The best people charge usually just above middle or gapcover – which is what i mostly do. If private of course

      • They generally aren’t a bit light coming out. They are well trained but like everything experience counts too. You say burn out is high but then they are gouging if they charge too much (according to you) starting in their mid to late 30s.