UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...
* Wed. Oct. 20 @ 2:00 pm ET - Beige Book Report
* Tues. Oct. 26 @ 10:00 am ET - CB Consumer Confidence
* Fri. Oct. 29 @ 8:30 am ET - Core PCE Price Index m/m Data
* Wed. Nov. 3 @ 2:00 pm ET - FOMC Announcement + FOMC Forecasts and @ 2:30 pm ET - Fed Chair Press Conference
* Fri. Nov. 5 @ 8:30 am ET - Employment Data
* Tues. Nov. 9 @ 8:30 am ET - PPI m/m & Core PPI m/m Data
* Wed. Nov. 10 @ 8:30 am ET - CPI m/m & Core CPI m/m Data
* Fri. Nov. 12 @ 10:00 am ET - Prelim. UoM Consumer Sentiment
* Fri. Nov. 12 @ 10:00 am ET - Prelim. UoM Inflation Expectations
* Tues. Nov. 16 @ 8:30 am ET - Retail Sales & Core Retail Sales Data
* Wed. Nov. 24 @ 2:00 pm ET - FOMC Meeting Minutes
*** CLICK HERE for link to Economic Calendars for all upcoming events.
Saturday, May 18, 2019
Monday, May 13, 2019
While the SSEC literally exploded during 2007 compared with the gains made by the SPX, and made an anaemic attempt in 2015, it's, essentially, gone nowhere since mid-2015.
If this is a harbinger of things to come, I'd say that China is in for a rough ride over the next few years...particularly in light of the current trade war with the U.S. And, it's time for them to negotiate in good faith, as Senator Grassley has tweeted.
You can see from my post of May 6 that major support sits at 2500 for the SSEC. If it blows through that level, watch out below!
World markets closed the day massively in the red on Monday...possibly related to this trade escalation and perhaps other world tensions, e.g., Iran, Venezuela, North Korea, etc., as well as slowing world economies. We'll see how overnight trading fares in China tonight.
P.S. Is anybody besides me getting tired of President Trump's incessant "good-cop bad-cop" tweets/messages regarding trade talks with China? All you have to do is look at this 60 min chart of the SPX to figure out where and when after-hours "bad-cop" tweets/messages were let loose by either him or his negotiators, and when "good-cop" tweets/messages were released during market hours. It's getting silly...and predictable.
And, isn't it about time that he finally outlined a comprehensive trade policy that, not only includes China, but other world countries, as well? It's long overdue, in my opinion!
Saturday, May 11, 2019
In my 2019 Market Forecast post of December 17, 2018, I reported that the SPX gained 9.62% for 2018 and thought that, "2019 is likely to bring the same level of volatility and uncertainty, not just in U.S. equity markets, but in other world markets and world politics, as well." That was based on the assumption that central bankers would continue to tighten their monetary policies, with no further fiscal stimulus packages on the horizon in the U.S. at the time. Since then, the Fed has loosened its monetary policies and has indicated that no rate hikes would be implemented in 2019.
I further mentioned that the SPX may, either, retest its all-time high of 2940.91, or resume further declines, putting it at 2400, or lower, to possibly 2250 or 2000 (on the date of my post, the SPX had closed at 2546.2).
After hitting a low of 2346.58 on December 26, the SPX closed out the year at 2506.85 and has since climbed to a new high of 2954.13 on May 1, surpassing its prior high. It has pulled back a bit to close at 2881.40 on Friday.
After further examination, I'd now add 2800 and 2600 to those major support levels, which are evident on the following weekly chart (shown in simple "area" format). At a glance, 2600 stands out as a "right shoulder" target on a potential "inverted head and shoulders" formation, albeit following a large rally from the 2016 Presidential election, rather than after a decline, which would be more typical for this type of technical formation in order for it to trigger and spawn a new rally to, potentially, new highs.
Inasmuch as the SPX has pretty much fulfilled my forecast in its gains for 2019, we may have just seen the top put in for the year, and we may see it pull back to, at least, 2600, or lower. At the risk of repeating myself, I'll, instead, refer to my recent posts here, here, here and here, which describe the market gauges I'm monitoring in this regard.
Monday, May 06, 2019
I last wrote about China's Shanghai Index (SSEC) on March 25, at which time I identified 3150 as major resistance. Price had closed at 3043.03 that day.
Since then, price briefly broke above 3150 to hit a high of 3288.45 on April 8, and, after retesting that level several times over the next few days, it finally broke and closed below on April 25. In Sunday's overnight trading it closed today (Monday) at 2906.46.
Monday's losses occurred after two tweets Sunday night by President Trump regarding trade and tariffs, as noted below. The third tweet was posted today.
Today was another bad Monday (to put it mildly) for Asian markets, as noted below (screen shot taken at 1:30 pm EDT)...(source Indexq.org)
In my above post, I said the following regarding the SSEC:
"I've shown the input values of the momentum (MOM) and rate-of-change (ROC) indicators as one period. They're both still below the zero level and have, in fact, been declining on recent attempts to move higher during March.
If price breaks and holds above, say, 3150, I'd like to see both of these indicators also break and hold above zero, while making new highs, as well, to confirm the sustainability of any further meaningful advancement beyond that price.
Otherwise, look for this index to retest its last weekly swing low, or plunge lower, inasmuch as its stability at current levels is questionable."From the following updated weekly chart of SSEC, both the MOM and ROC indicators (shown with an input value of one period) failed to make a new swing high as price made its new swing high on April 8, and they've been declining ever since, to end back in negative territory...hinting of further weakness ahead.
Major support sits at 2500. Whether it hits that level, or plunges lower, may depend on future unpredictable Trump tweets (which have ranged from extreme optimism on a trade deal, to these latest threats), or on other internal Chinese factors, or other external world events (e.g. tensions/events involving North Korea, Iran, Israel/Palestinians, Venezuela/Russia/Cuba, etc.).
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My thoughts outlined in my May 4 post, "I think that U.S. equities and bonds will continue to outperform the rest of the world markets," haven't changed, although we may see some increased volatility and deeper pullbacks over the coming weeks/months than I may have anticipated.
As the S&P 500 Index (SPX) made its new all-time high of 2954.13 on May 1, its corresponding SPX:VIX ratio was not corroborating that strength. As of 2:19 pm EDT today, this ratio had dropped to its 200-day moving average, after it began its decent when it peaked in mid-April. A drop and hold below this moving average (say, 180) could see the SPX plunge much lower (watch for a break and hold below near-term support at 2900) as the SPX:VIX ratio drops to, potentially, 100, or lower.
* UPDATE May 8...
Saturday, May 04, 2019
Inasmuch as other countries, such as Canada, have numerous trade messes with multiple countries that they're trying to sort out, without much luck, so far, and with their economies slowing, I don't see a growing world-wide slow-down abating anytime soon.
For example, German manufacturing PMI contraction continues to deepen for the fourth straight month, as noted below.
Major resistance for the U.S. dollar sits at 100.00 and major support at 90.00, as shown below.
So, basically, I've nothing significant to add to what I posted on March 26 and April 3, except to suggest keeping an eye on the market gauges mentioned therein.