Macro Morning

See the latest Australian dollar analysis here:

Macro Afternoon

The BTFD crowd saved the shenigans on Wall Street with a big follow through of risk taking on Friday night despite a very poor retail sales print, followed by a lacklustre industrial production number. Bad economic news is good stock buying news, so expect some more bounce and kick in the step when markets return on Monday morning.

The crypto world is less sanguine with a big change in players evident as Bitcoin was extremely sold off due to the DogeMaster Musk, ending the week down over 10% lower at below the $50K level. The daily chart does not show much hope of ever getting back to the previous $60K high, but stranger things have happened. Watch for any close below the previous $46K level for signs of capitulation and a proper monkey run:

Looking at share markets in Asia from Friday’s session, where the Shanghai Composite bouncing back hard, up over 1.7% to almost finish the week above the 3500 point level, while the Hang Seng Index also headed higher, finishing up nearly 1.2% to 28027 points.  A lovely bounce off of the March lows (solid black line) which could have more legs here but requires a solid break above the high moving average at the 28400 point level before considering a swing trade:

Beleaguered Japanese stocks however came back the hardest, with the Nikkei 225 closing 2.3% higher at 28084 points. The daily futures however are looking even more promising given the confirmed Wall Street rebound on Friday night, but this is a deep hole to get out of. Bottom pickers might put on a small position here, but the real confirmation is at the previous weekly lows at the 28400 point level, then trailing ATR daily resistance at the 29000 point level proper:

The ASX200 was able to stave off its own mild selloff, gaining some 0.4% to close the week out above 7000 points, but only just at 7014. SPI futures are up nearly 50 points or nearly 0.7% so we should see a very positive start to the week here, despite a deep look into the previous March/Feb weekly highs at or around the 6900 level. The daily chart and price action are suggesting a possible topping action here if the 7100 point barrier is not breached soon:

European markets were bullish across the board and continent, with even the FTSE regaining from its mid week losses, closing up over 1% higher while the German DAX did the biggest lifting, up 1.4% to close the week out a new weekly high – but not above its recent high – at the 15416 point level. The psychologically important 15000 point level was being supported strongly here despite some big intrasession volatility last week, but sentiment looks to have turned around, although like other market positions, I’m looking for a proper breakout above the early April high:

Wall Street was even more energised with the most depressed market – tech stocks on the NASDAQ – pushing back the hardest, up over 2% while the broader S&P500 gained nearly 1.5% to finish the week at 4173 points. The daily chart clearly shows its out of the danger zone with price action zooming past the mid April support and daily ATR support levels. This is an important fill and should set up for more buying support with the uncle point clear at the 4120 point level in the days ahead:

Currency markets have swung back away from the USD with most major currencies filling in their mid week dips, as Euro almost returns to the mid 1.21 level on Friday night in the weight of the disappointing retail sales print. This takes it out of trouble as it saw a lot of  buying support evident at the 1.2050 zone as no new session lows were created last week. Momentum has switched back to slightly positive readings, with some more small potential for upside this week but resistance at the 1.2160 to 1.2180 may prove too tough to beat:

The USDJPY pair breakout continued to wane on Friday night with only a little bit of intrasession buying support to keep it above the 109 handle. The expected reversion to the 109.50 level is still looking like an acceleration but does require more support at the low moving average here going into today’s session:

The Australian dollar was looking quite depressed mid week but has rallied amid the other risk markets, pulling up towards but not through the 78 handle nor the previous support, now resistance level at the former weekly highs. If there’s anymore iron ore or oil downside, I’m watching for another return here back to the 77 handle and possible capitulation below:

Oil prices are trying hard to stabilize in the wake of the growing unrest in the Middle East plus Friday nights private oil rig count and the Midwest US hacking problems with hoarding etc etc. Brent crude pushed back towards the $69USD per barrel level on Friday night after a violent reversal in the previous session. Daily momentum is still positive but not properly overbought yet to confirm this as a comeback, with price action not yet able to make a new weekly high:

Gold is no longer restrained by a strong USD with the recent pulldown in price in the wake of the CPI print all but forgotton, with a late surge on Friday night taking it to a new weekly and monthly high at the $1843USD per ounce level.  This advance above the psychologically important $1800USD per ounce level now has a lot of legs to continue up to the November 2020 highs at the $1960 level:

 

 

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)

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. Macro Mornings posted at 8.30am instead of the recent run of 9.30am – I likey!

    • Kiss an angel good morning
      And let her know you think about her when you’re gone
      Kiss an angel good morning
      And love her like the devil when you get back home