Flexible Trading – Inter Market Analysis

Risk On

  • SABMiller beverage volume grows in Emerging markets
  • European Index little changed despite stimulus speculation (as we argued previously that until it is set in stone, this will remain as a noise)
  • Asia stocks rose 5th day – following gains made from US equities (earning seasons / revised numbers) Nikkei up as market continue to believe weak data means more stimulus
  • Central banks meeting from BOJ to Fed minutes – suggesting a dovish remark across the board
  • Goldman stated that the Fed may never hike in 2015 and could further delay till mid 2016
  • RBA no further cuts – see modest growth in the next quarter and will be China dependant

Risk Off

  • German Factory Orders unexpectedly fall in sign of economic risk (has not taken VW into effect) coupled that with the weak NFP – no rate hike for October?
  • VW sued by West Virginia over clean diesel claims / losing market shares / talk of several fixes ranging from upgrade to new car
  • Risk off trade perked up with demands for Euro and Yen – dollar languishing lower
  • UK new vehicle registrations for Sept came in lower than expected
  • Russia checking claims of its plane violating Turkey’s airspace
We now have a rather positive structure across the equity market – central banks are looking to add monetary stimulus, the worse looks to be over, VIX could head lower as confidence is back, new money supply help boost stocks market. In the short term, pullback in equity looks viable for a test higher. However, we will not rule out another retest lower to flush out weak longs.

Extra Stimulus has yet to kick in but wary of the build up to Santa rally

Multi Time Frame Analysis

USD index

Daily

4 hour

As previously mentioned, we see the previous fractal to play out here on the dollar index as it trade within the range until we get a clear view from this week Fed meeting minutes but also the up and coming FOMC meeting. We continue to see consolidation but with whipsaw move within this range.

German Bund

Daily

4 hour

We have on the 4 hourly charts a confirmation of a reversal and Bunds are undergoing the pullback that we have waited for a while. Price action could find support at what was resistance now support zone so to those traders who short – it is best to lock in some profit and trail stop loss. Main target for the short will at least be the mid-Bollinger band of the daily chart.

The bunds price action is very well supported and we cannot rule out higher prices though we do see a potential pullback. For a pullback to work, we will need a confirmation from the daily chart with a blow off top candle formation.”

Eur/Usd

Daily

4 hour

Whipsaw prices post NFP – gains made was lost within the day and the sellers dominated the game here – adding pressure to those who are holding long on the euro pair. Note on the daily chart price action has produced a lower high and higher low – converging in a symmetrical triangle – potentially could see a breakout. Meanwhile, the 4 hour chart is also showing a potential bear flag formation with an AB=CD. Fed meeting minutes could give some short term directional play.

German Dax

Daily

4 hour

Price action as mentioned last Friday – was bullish and we have a follow through buying into Monday – as price aimed to target the 4 hourly 100 ma. The selloff in Euro and yen added risk on pressure – while the new month started with a bang after discounting all the negative news. We think a pullback here is healthy for the market after a vertical rise – pullback will be an opportunity to add on longs.

Gold

Daily

4 hour

Well we have a bad NFP numbers and gold found support at 1104.50 – adding upon layers of support at the 1095 – 1105 zones – and only a break below this level will trigger a bigger sell off for 1070. Otherwise, the daily chart has a large symmetrical triangle formation with lower high and higher low – price action is converging for a big directional breakout play. Often, this formation is a continuous price action – with the overall trend lower then we cannot rule out a break lower. Only if we break and close above 1155 then we could head a lot higher.

Silver

Daily

4 hour

Silver held on the support zone and we have the breakout of the tight wedge on the back of the poor NFP data. Once again, we would like to remind our readers that Silver often have a rocket moment but often short lived. We are on the verge of seeing another pullback if price action agree. One key thing to remember is that we have price action trading above 20 daily ma and 100 ma – while the 200 ma could be the target on this move. For short sellers, it is best to wait for a blow off top formation to enter a trade.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s