Trade Back On Front Burner

On the 24th of October we reiterated our views around what we thought would help the markets to improve into the year end:

http://www.mintermarkets.com/the-bulls-see-hope-we-think-they-will-have-to-wait/

We stated:

What to watch for if you are bearish or bullish:

  • Any sign that the Fed is wavering regarding the current guidance for rate hikes (we do not feel the Fed will change unless there is a significant decrease in growth)
  • A possible agreement post midterm elections between China and the U.S., which alleviates some of investors’ concerns and helps China increase growth.
  • There is some kind of workable compromise regarding the Brexit negotiations.
  • The standoff between Italy and the EU, is resolved or more likely, kicked down the road.

We see the possibility of a rally between the middle of November and into the end of the year, given that some of the key issues begin to find acceptable solutions.

As we await the Unemployment numbers today from the U.S and the elections next week, we are starting to get some clarity on the above issues:

  1. The Fed is not wavering yet, but the market seems to be pricing in less hikes than was the case a few months ago
  2. We think this is the key event for the market between now and year end and although the Twitter history of President Trump is often less than reliable, an agreement of some sort on trade will be in the interests of both China and the U.S.  (even if it is temporary)
  3. Brexit is still a bit difficult to handicap, but it feels to us that as the deadline approaches we seem to be getting antidotal evidence that both the EU and the U.K. are trying hard to find a way to solve the current situation.
  4. EU and Italy, seems to us to be the most difficult of the above to solve, and will have repercussions for Europe.

Unemployment Friday as our readers know, is not a day that we feel we have to take risk, we feel it is better to wait until the dust settles and position ourselves after the market has digested the numbers. 

Key Headlines this morning:

  • Trump asks cabinet to draft possible trade deal with China.   (Bloomberg)
  • Dow jumps 265 points because there is finally hope for the trade war’s end  (Barron’s)
  • U.S. oil prices fall to lowest since April  (WSJ)
  • Apple posts record results but weak revenue outlook (WSJ)
  • U.S. corporate debt feels the chill as yields shoot up (FT)
  • European stocks on track for best week since 2016 (FT)
  • Rising interest rates pinch U.S. auto sales, consumer confidence. (Reuters)

Close above 2760 on S&P CFD give sus confidence that the bounce is  not over, close below 2690 signals that this was just a bounce in a bear market.

USD index managed to print  a new high, but did not manage to hold.  Good news on trade and slower growth in U.S. pointing to a change in direction, or merely a  correction to 95.00 level?

Contact us if you are interested in receiving real time trading signals. In doubt? Check out our track record below!

TickerDate OpenedEntry PriceStopTarget PriceCurrent Price
Long Gold (XAUUSD)11/1012091209Increase on break above 1231/12381234.81
Long S&P CFD31/102711267028002735
Long Deutsche Bank (DBK)2/119.228.80First 11.00
Then 12.50
9.079

Visit our Position Tracker to look at all of our realized trades and proven track record: http://www.mintermarkets.com/position-tracker/

– Mark W

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