Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Asian stock markets have begun the trading week in a mixed fashion, with Japanese markets closed as the risk complex takes a deep breath after Friday’s falls on Wall Street. Gold is still holding on, seemingly making another short term symmetrical triangle pattern on the four hourly chart, now just above the $1950USD per ounce level:

In mainland China, the Shanghai Composite is selling off into the close, down nearly 0.7% to 3314 points while in Hong Kong the Hang Seng Index is falling even faster, down 1.6% to 24053 points. Japanese stock markets are closed for yet another holiday while the Yen buying continues, as the USDJPY pair falls towards the 104 handle, continuing the breakdown from last week:

The ASX200 is selling off as well, having started the session flat but sold off after lunch to finish 0.7% lower to 5822 points, down nearly 5% for the month while the Australian dollar is holding on just above the 73 handle and looking firm here going into tonight’s session:

Eurostoxx and S&P futures are down nearly 1% with the S&P500 four hourly chart about to break through its bottom from last week, as the 3300 point psychological level looms:

The economic calendar starts the week slowly with the only event of note to watch out for is a speech by ECB President Lagarde.

PS: 43 days til the US Presidential election. Thank Dog below…

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Comments

  1. Gees, this is going to be a long 4 alcohol free days, but it makes that Friday arvo pit stop at Dan Murphy’s all the more enjoyable.

    • I see the Chevy Corvair Monza on the list. Another car that interests me. But hard to find locally. The car that’s gone nuts in the last 12 months is the R34 GTR.
      http://www.gtr-registry.com/en-r34-gtr-auction-results.php

      Report for June 2020 – August 2020
      Report:

      WOW!!! Lets get straight to it:

      —> AVERAGE SALE PRICE UP 49.6% IN THE PAST 3 MONTHS <—

      Absolutely unbelievable results this quarter. Records were set all over the place. With quite a number of high quality low milage R34 GT-Rs sold at auction, and an overall trend of increasing prices worldwide for JDM cars in the past few months, I was expecting this quarter to be up a fair bit, but nowhere near what this data shows.

      Average sale price for R34 GT-Rs over the past 3 months is 11,190,606 yen ($145.0k AUD / $106.4k USD / 82.2k GBP / 89.5k Euro)*!!!!! Car cost only [see below].

      This is up 49.6% in the past 3 months and up 56.4% in the past 13 months.

      Sorry if this means the R34 GT-R dream is dead for you. What can I say? The prices on these have gone nuts. And it's only going to keep going up, with insane levels of demand coming from all over the world. Demand in USA will continue to climb as they slowly become more legal over the next 7 years. Here in Australia they seemed to have doubled in price and have become very hard to source as very few are being listed on the market.

        • Paul Walker Fast and Furious kids love it. But getting closer to 25 years old and seems that there is huge demand from the US of A. The newer R35 GTRs are all autos and use a V6 engine. Great performance but less engaging drive.

          Good video for comparison.
          https://youtu.be/wev_gievHmo

          Thing is there isn’t many R34s made. Some of the more special versions command half a million + the Vspec II Nur is basically top of the range. But Z Tune is the boss.

          Good car? Yes very cool if you like Japanese performance cars. Is it a bubble? I hope so. I want 1 and have for 20+ years but prices never really dipped below $50k.

          I got a Nissan Stagea 260rs which is basically mechically a GTR but in the shape of a wagon. These have also gone up in value in the past year or so.

          It’s a fantastic motor (Rb26).. with lots of tuning potential.

          • You’ve brought back memories – I worked at a carparts place at high school. When I bought my first car, I was virtually servicing the fcking thing every two weeks — cheap old car but had the best of everything. Always under the bonnet replacing something – not that I had a clue. But it felt good doing it and I’m sure it was running that bit smoother (and accelerating that bit faster) 😉

      • Arthur Schopenhauer

        Keeping a combustion car will be like owning a horse soon. This overpriced 25 year old car thing is a forward indicator.

        • I don’t agree. I like electric but car enthusiasts will always love internal combustion engines for the sound and experience.

          • Arthur Schopenhauer

            Yeah, just like horse lovers still love owning horses. 😀 There is not going to be a choice of new drive trains soon, not because of any high minded policies, but because the entire global manufacturing chain is shifting to electric drive trains.
            That’s where the profit is. That’s where the growth is. And right now, the land grab is on. Like the internet in the nineties.

            [Edited for clarity]

          • Oh I agree internal combustion will be obsolete, but I think gear heads like me will still want to own them and perhaps certain models will become more desired. I don’t think you’re average Toyota Yaris will hold much value, but cars like the GTR will be popular long after I’m gone (I think). But you never know.

          • And what about when some state actor pushes “send” on a nuke or EMP and knocks everyone’s cars out
            You’ll be bush bashing in a -insert cool old car with no electronics – saving the world Tomorrow When the War Began stylie!

        • Probably but they have always been in demand and I think the buyer pool is widening. So perhaps you’ll need $300k to get 1 soon.

          • 916 is cool, but not my thing. The Dino however has always been on my list. I recall in early 2000s they were $49-50k for a good 1. I thought that was expensive at the time. Now they are approaching half a mill.

  2. Isn’t it a bit suss that Trump gained with black people and Hispanics, but lost with white people? It could be some shy Toryism of white people not wanting to be cancelled for saying they back Trump. It’s hard to believe that Trump could gain those other votes but lose white votes.

    • Apart from Trump die-hards most would prefer to keep their views to themselves and in this environment (all this woke [email protected]), who can blame them. People’s lives can be seriously impacted by going public.

      • Yeah I agree. There are people out there who think it’s admirable and praiseworthy to harm people for supporting Trump. People won’t take that gamble to respond to a pollster. Things are even worse than in 2016.

      • TailorTrashMEMBER

        In the (hopefully still ) private setting of the voting
        booth people will make their choice ….should Trump
        again deliver a surprise versus the polls …..the cartoons will be bigly enjoyable ……

        • Looking at it objectively (I don’t live there, so why not):
          – better the devil you know
          – senile old goat contesting
          – Kamala Harris
          – tough on law and order vs support for Antifa and other extremist orgs
          – woke BS
          – raising taxes on middle classes to pay for all manner of welfare schemes
          – AOC and other Marxist types in the background
          – reparations for slavery (And assorted lunacy)

          Ya know – it wouldn’t surprise me if Trump romps home at a canter. What would surprise me is if the Dems won it cleanly.

    • The Traveling Wilbur

      So, markets reckon Trump is about to become a trophy footstool, or just clearing house before the next leg-up?

      (sure isn’t COVID related)

      • FUDINTHENUDMEMBER

        Yeh dunno it’s just about time for technicals certainly and sentiment also to turn around. Too much froth and no good reason to keep it all moving up.

  3. – The action of the USD / Yen kept confusing me in the last months. Not too much conviction in what this cross did. But now it seems this cross is determined to go lower. Time to go short USD and long Yen ?
    – The AUD / USD cross was also a surprise in the last months. Went short AUD and long USD too early and that trade “wasn’t profitable”. Seems the AUD is (finally) about to go lower. Just have to wait and see a little more what is going to happen there.
    – Even the EUR / USD has been surprsingly strong. Now also at a turning point ?
    – The USD is going to king again ? in the coming months ?

      • The DXY (yellow) is almost a mirror image of the EUR/USD – that’s what you’re seeing there. EUR/USD has been trading in a descending wedge for quite some time and looks ready to break. He asks which way. I say to the upside. The USD may see some strength over the next month or two and delay the event but the Fed has nailed its colours to the mast and told the world it intends to trash the USD.

        • – The FED has actually been unwinding (a very significant portion of) the QE of the 1st quarter of this year.

          • Not sure about unwinding but it’s certainly doing a lot less QE at the moment than it did in Q1/Q2.

            To put it into context: the Fed took nearly a hundred years to build its balance sheet to $900bn (just pre-GFC).

            In the space of three months this year it added $3 trillion.

        • – No surprise. The DXY is is for say 80% a “game” between the european currencies and the USD.
          – I actually fear that the USD will “go ballistic” (i.e. much higher) and at a much higher pace than many expect or can imagine. And that’s the worst that can happen to the financial markets. And the US as well. Because it will crush the US Trade deficit even more and potentially turn it into a Surplus. People who are familiar with Balance of Payment issues know how detrimental a Trade Surplus is for the PETRODOLLAR system.

          • Meh, there are so many dollars sloshing around right now in a global economy with too much slack. I just weakness ahead.

        • It worked on the phone. My adblockers and browser security add one are stricter on my laptop. Yeah interesting selection of comments. Still some deluded fools who can’t think logically but they were a definite minority. Have to admit the poolside conversations I managed to have in between lockdowns surprised me, everyone was into the housing and population ponzi and wanted it all to burn down.

    • There’s some excellent comments there for sure. Then there’s this m0ron called ‘sunny’:

      “Ah lord the anti immigration crowd are being encouraged again. They don’t get that immigration is growth for the nation and economy, without it we stagnate and become a banana republic. We have a very small population, we need more people…simple.” (Who gets 2 ‘likes’ for his comment)

      We’re going to ‘become a banana republic’ if we DON’T encourage immigration. Yep, he (she) said it …

    • A few comments on a fairfax article are not going to shift the dial, but there will be a backlash when they let temp visa holders back in. Thing is that there is no where for the backlash to go. Hanson… Palmer…yeah right…. they both send their preferences right back to Scummo.

      • Bullshit Australia – A voice for Australians in the age of complete and utter bullshit

        Bullshit Australia – Your politicians have been bullshitting you for a generation, and it’s time to bullshit back

        Bullshit Australia – the party for a nation headed by a bullshitter who doesnt know what to do when told someone doesnt want to shake his hand, when the opposition is still practicing its fart lighting routine in a closet somewhere

          • I do too when all is said and done, but nothing captures the way I feel about Australian politics and the open corruption of political process quite like Bullshit Australia – A voice for Australians in the age of complete and utter bullshit

          • RobotSenseiMEMBER

            I’m going to lend my efforts to health policy in a few weeks when my schedule clears up. When can I get in on a mailing list?

        • Straight Up Australia

          Stand Up Australia
          Wake up Australia

          Anti/Stop Corruption Australia

          Stop the Rot

          Clean Up Politics/Australia

          Get yer Sh1t together

          No more grubs

  4. wanted to keep to myself but can’t help it.. this is how smart I am:
    As you all know I predicted correctly how markets are going to play out last week and it looks like I am on the money for tonight. As per my comment on Macro Morning, I said futures will matter.
    This morning knowing the risks I decided not to trade. The moment futures flashed green I bought into SBM. It was $1.5k lesson I learnt.

    Are we going to see gold below $1850usd by end of the week?

    • We might see a capitulation in gold, yes….I think it’s overdue and has shown that it can’t give the traders what they want…

      I broke my personal rules today (again) and for the last two days and bought heaps of BBOZ and BBUS, as I sniffed that the trends weren’t happy…

      Wish I’d sold some gold miners today…was going to but didn’t…

      • Rorke's DriftMEMBER

        Thanks for alerting me to BBUS. Haven’t traded that before but looks a good instrument to hold through the next period of volatility. Their fact sheet explains it and looks straightforward. Are there any traps you found. What about liquidity, getting in and out.

        • I normally settle BBOZ and BBUS within 10 minutes, via Commsec.

          I’ve heard others say that they are not great to hold long term, as they don’t quite follow the patterns they are supposed to. However, as I rarely hold them very long, and don’t buy them often, I find them ok as an amateur retail occasional trader; I typically only use them these days to cover/hedge long positions if I’m unsure or nervous about market direction. They help me sleep better at night sometimes.

          Sometimes I buy them if I’m fairly sure that the ASX or S&P will correct (like end if last week and beginning of this week), but my success with that is mixed, so I try and avoid it.

    • Gold $1931 as I write…I wonder if it can hold $1930? Doesn’t look good, though, as momentum looks to be against it…

      Gold holding $1930 is the indicator of the night for me, as to whether the USD is still truly king (I suspect it is).

      • Gold might have a bit of a puke but it won’t go too far. I don’t mind trading around a core position but I prefer bigger moves for safety. There is an extra $3 trillion of Dollars sloshing around since the end of Feb – not counting the net commercial production of dollars. Am sceptical that the dollar can push that high with so many in circulation.

        • Fair points; I would tend to agree. My ego doesn’t want me to suffer a $100-200 drop whilst holding miners…physical or PMGOLD I don’t mind so much…

          Hence, I try to trade it (reluctantly)…gosh, I’m looking forward to going back to just holding shares…

          • You’ll sleep better at night if you’re not constantly trying to trade the swings. Settle for the trend changes instead.

          • That’s fair, Dom.

            I’m just not sure where things are going, so find myself trading shorter periods and smaller gains, following price directions.

            I’m sleeping better since doing that, jumping in and out more frequently.

    • You day traders amaze me. I feel it’s gambling honestly. I just buy and hold.

      I have a friend in the US who has flipped cars for ages. But in truth he should have held a few. Would have been better off. Plus less headache.

      • I want to buy and hold…but it all feels so toppy and bubbley, and I just can’t….

        Doesn’t help that most of my trading cash is actually for other things, and I can’t buy and hold with it too long…sigh…

      • if you understand the stocks you trade you’ll make money. This is how I work:
        1. Investing – following long term trend and if I find cheap stock I buy and hold until I think it will not go any higher due to growth limit and price of the commodities it produces, products, or services that provides, competition crowding the market etc..
        2. Trade – all stocks swing daily and once you work out how that works you can make daily wage if you are disciplined. That is hard to do though as in my case now. I knew it is too risky to trade and that stocks will not follow their daily routine and that futures will have too much influence but I still tried. However, I don’t make those mistakes too often. I made one last week too and that was tactical decision as I did not want to risk. I made 6 other trades in between and made money on all.

  5. It’s strange and pitiful that men go through their lives so focused, so emotional, so angry about something such as Trump being the US president. Like it’s their life’s purpose to mock and say how much of a d.i.ck he is.

    And for these men, Trump will never even know or care of the weight of vindictiveness these little men carry around each day. Trump being president or not has zero impact on their lives anyway but they still need to carry this rage and envy.

    And it is driven by envy at the core. Trump has been more successful at life, money, women, etc. and the men afflicted with envy just cannot tolerate it.

  6. Goldstandard1MEMBER

    Guys, don’t tell anyone but the best way to make money is buy the dip. Property and shares.

  7. Trigaboff whinging on Sky News this morning (was on social media) about lockdowns.

    You know he’s bleeding when he personally makes a rare media appearance and not Gottiboff. Good. Eat sht.

      • Mining BoganMEMBER

        No idea, but rest assured the MSM is trawling through every bit of his past to find a misdeed.

        I wouldn’t mind betting the journo was already copping punches in the face from Bruz before he hung up.

  8. When to get some photos printed in the inner west sydney and the printers went bust and closing down on friday. Sold their printers already. So went to the newsagency down the road; they closed down as well. I though the last place i could try might be cartridge world a few shops down; they closed down as well. Thought that i will have to go into the cbd officeworks after work; absolutely dead. Streets were empty, bars were empty, there was no life at all. I thought that being a warm night and all there might be a few people getting into some drinks but no, nothing. It was really depressing. Having lived in milan, paris and london, sydney is just so dull and lifeless .Even at the best of times its not great but now….its gone.