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China is slowing down, the US homes sales are growingYesterday was notable for the fact that for the first time in an epidemic, the number of new cases in China was lower than in the rest of the world. On the one hand, this indicates a reduction in the epidemic in China, and on the other, the continuation of the deterioration of the situation in the world. Since the situation with the epidemic in China is improving quite rapidly, we can begin to summarize its preliminary results. And although it’s too early to talk about specifics, some estimates can be obtained already here and now. These are the so-called early response indicators. For example, Bloomberg calculates 8 early response indicators for China. So 5 out of 8 in February decreased. But this is not the worst. The February indicators of business confidence fell to the lowest values in the history of observations. Business can be understood: the sales of new cars and real estate in China fell by more than 90%. Bloomberg data is also confirmed by a monthly study of the health of small and medium enterprises in China. The results are record low in the history of such studies. As for the more classical metrics, it is expected that China's GDP growth will decline to the lowest levels since 1990. Goldman Sachs, for example, expects China's GDP growth in the first quarter by only 2.5%. A sharp slowdown in the economy is frightening not only by the fact of the slowdown but also by the problems that it carries: rising unemployment, increasing bad debts, increasing bankruptcies, falling financial results of companies, decreasing domestic demand, etc. Speaking of official statistics, the first signals will appear on February 29, when the February PMI for China will be published. As expected, it will fall to the lowest levels since the global financial crisis (while some experts predict even lower values). Yesterday's data on sales of new homes in the USA looked rather provocative against this background: in January they grew by +7.9% to 764,000 with a forecast of +3.5% to 718,000. However, we will see what will happen there in February, especially in light of the Center’s warning the United States Disease Control and Prevention Regarding the threat of a possible spread of the virus throughout the United States. In general, the situation continues to be tense and for any positive, whether it is a decrease in the number of patients or the development of a vaccine, there is a negative right there (problems in the economy of China and the world, the spread of the epidemic, sales on stock markets, etc.). Accordingly, we do not see any reason to radically change anything in the trading plan. So today we are looking for points for buying gold (but we are careful - we buy on the slopes with mandatory stops), we sell oil, we sell EURUSD, we buy GBPUSD, we sell USDJPY with small stops.
Short
by Trade24Fx
Markets scare and there is something to be afraid ofOn Monday, the markets were finally really scared. The coronavirus epidemic is becoming global, and the economic consequences are increasingly threatening. Every day, China's downtime literally increases the problem exponentially. Actually, some analysts are already talking about the critical level of problems and damage. For example, a survey of managers of more than 1,500 Chinese small and medium enterprises (small and medium enterprises accounted for 99.8% of all companies registered in China and 79.4% of all employees work in them) showed that 85% of them will use up all their cash reserves in 3 months. But this is a potential threat. As for the real ones (that is, the damage that has already been done), 50% of respondents said that an outbreak of coronavirus will reduce their annual profit by at least 50%. And according to the latest Dun & Bradstreet research from the list of Fortune 1000 companies, the main supplier is China for 163 companies, and for 938 China is a second-tier supplier, that is, their main supplier depends on supplies from China. Thus, the level of dependence of the world economy on China is critical - about 94% (!). Accordingly, the problems will increase like a snowball. And lowering Apple’s forecasts last week will seem like an innocent joke compared to what the global economy can really expect. In the best case, corporations will sag strongly in profits, and in the worst, they will greatly sag in income. Not surprisingly, the Fear Index (VIX) showed 50% growth during the day. It is rather surprising that he has not grown recently. And the gold maximums in the region of 1700 - this is not all that the asset wanted to say on this subject, and sales on the global stock markets by and large just started. The yield on thirty US Treasury bonds, meanwhile, reached a historic low. Which, in general, explains why the dollar has recently felt so confident in the foreign exchange market. Our basic positions today are unchanged: we are looking for points for buying gold (but given the strong oversoldness of the asset, we are doing this conservatively and with obligatory stops), we sell oil, we sell EURUSD, we buy GBPUSD, we sell USDJPY with small stops.
FOREXCOM:XAUUSDLong
by Trade24Fx
Shanghai Composite Index: just a narrativeHi Guys, here the allocation of some events that impacted the Shanghai Composite Index (as well as worldwide financial markets): 1) China became a member of the World Trade Organization (WTO) on 11 December 2001; (en.wikipedia.org) 2) Financial crisis of 2007–08; (en.wikipedia.org) 3) 2015-2016 Chinese stock market turbulence; (en.wikipedia.org TO NOTE: following 2) and 3) the Index was always supported at higher levels. Need to take into consideration that stock market is still young and the System must be supported. TO NOTE: impact of COVID19 in the violet circle at present. Please share your views or comment and if you have any questions please do not hesitate to ask. Thank you for your support and for sharing your ideas. Disclaimer: Please note that I am not a professional trader and these are my personal ideas only. The information contained in this presentation is solely for educational purposes and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. Cozzamara is not responsible for any liabilities arising from the result of your market involvement or individual trade activities. IMHO: The point of trading is to make money. To make money you must have money. Depending on the money at your disposal, you can decide what to do and how to do it. By having stops you decide how much you are willing to lose. By having targets you decide how much you want to earn. Be disciplined with your protocol and with your strategies for trading. Sometime you win, sometime you lose. Don't be greedy. Be realistic. Be wary but not afraid. Be curious. Use your brain. As long as your working process make sense and your spirit is calm, everything will be fine. Be patient and be prepared for any circumtances.
S
by cozzamara
The week results: the epidemic swing, the yen statusThe coronavirus epidemic continued to be the main focus of financial markets last week. And if the week began with a rather optimistic attitude of investors against the background of a decrease in the number of new cases of disease and deaths, then it ended on a very minor note: the epidemic spread to South Korea and Japan. In addition, analysts after the warning increasingly began to think about the consequences of the epidemic and quarantine in China (Goldman Sachs estimates that economic activity in China does not exceed 50%). And the longer restrictive measures last, the worse the mood of investors. They can be understood: dozens, if not hundreds of millions of Chinese, temporarily do not work and lead an exclusively isolated lifestyle. As a result, production does not work at full capacity, the transport system is partially paralyzed, consumption has fallen sharply, the clouds over global supply chains are gathering more and more with each day of downtime. That is, an economic epidemic is beginning, which could very well become a global pandemic. Not surprisingly, against this background, gold is updating the highest mark since the beginning of 2013 and continues to confidently move to the 1800 area. The current week in terms of the epidemic is likely to change its focus. If before that all attention was focused on China, and the whole epidemic was geographically localized. Then this week, investors will focus not so much on China as on other countries where the number of diseases has risen sharply: Japan, South Korea (last week the number of cases doubled almost every day), Italy and Iran. Judging by the current dynamics, it is likely that the reserve of bad news has not yet been exhausted. As a result, the stock markets finally broke down and rained down. It will be difficult to say whether the current sales will become the beginning of a full correction, but there are all the prerequisites for this. Another injured last week was the Japanese yen. After the failed data on GDP growth rates in the 4th quarter, everyone realized that the third-largest economy in the world is one step away from the recession. As a result, the status of the yen as a safe-haven asset is damaged. However, we will not write off the yen from the accounts and will sell it within the day simply because the pair climbed very high (with mandatory small stops because we are reporting that we are going against the will of the market). Europe has traditionally already disappointed in terms of macroeconomic statistics and the general state of affairs, especially in Germany. Accordingly, the talk of a global recession against the backdrop of the problems of Japan and the Eurozone no longer seems fabrications and conspiracy theories. For fairness, we note that on Friday the data on business activity indexes in the Eurozone came out better than forecasts at the highest levels for the last 6 months, but so far this is only a drop of positive in a sea of negativity. In the UK, production growth generally showed a 10-year high, which allowed the pound to perk up and work out our recommendation on its purchases. As for macroeconomic statistics this week, the week promises to be quite calm. So you can focus all your attention on the news about the epidemic and expert estimates of the extent of damage both for China and the world as a whole. Our basic positions for the current week are as follows: we are looking for points for buying gold (but given the strong oversoldness of the asset, we are doing this conservatively and with mandatory stops), we sell oil, we sell EURUSD, we buy GBPUSD, we sell USDJPY above 112 with short-stops.
by Trade24Fx
Call your bluff - Shanghai surprise Again? Yes, the Shanghai Composite had a massive Gap Down after a two week Chinese New Year break due to the COVID-19 (SARS-CoV-2) outbreak in Wuhan, Hubei, China. Since then, week after week it made momentous recovery up to close the gap this week. While this is seemingly bullish, and is technically starting to pull the MACD bullish, I call a bluff. Here is why... 1. The system Sell signal has not been invalidated. Invalidation requires a break out of the long term trend line, with continued momentum (in the face of bearish looking Asian markets). 2. The current range expected is very large with a widening triangle With a slight probability advantage, I call a bluff on the Shanghai Composite, to be rejected at the trend line, and close the next week or two below 2975.
S
by Auguraltrader
1
Investors doubt and China operates at half capacityBefore investors could relax and believe that the worst was over, a new portion of reasons for concern arrived. It is about spreading the epidemic outside of China. Recall that almost 99% of everything related to COVID-19 took place in China. And investors at some point decided that everything that happens in China remains in China. Yesterday forced some to reconsider their position. The number of people infected in South Korea rose sharply (it jumped from 32 to 82 in a day, but more importantly, most of the newly diagnosed cases were parishioners of one church, where about 1,000 people were present at the time of infection, that is, we can expect a further increase in the number infected) and Japan (more than twice as many as 84 people jumped in a week), the first deaths appeared in Japan and Iran. All this makes us think about the spread of the epidemic around the world with all that it implies. By the way, about the resulting. China very clearly demonstrates what price has to be paid. Goldman Sachs experts analyzed data on a number of direct and indirect indicators, in particular, statistics on finished goods production, demand for steel and its reserves, coal consumption and real estate sales in China, and a number of other indicators, and concluded that economic activity in China does not exceed 50% of the average indicators of past years. That is, as we warned, it is too early to relax, the events are still in the process of development, and their consequences will become clear only after some time. Against this background, gold traditionally feels comfortable, which continues to stubbornly move towards the goal that we voiced a few weeks ago (1800 mark). But the yen’s problems continue and there are active rumors in the market that the currency is losing the status of an asset-refuge. Despite the current problems of the yen and the high likelihood of its further decline, sales of the USDJPY pair above 112 look too tempting to not try to catch a u-turn with small stops. Moreover, today is Friday - potentially the day of profit-taking. And the yen has something to fix. Considering how depressing statistics have recently been from the Eurozone, one can expect another batch of weak data from Europe and a new round of euro sales. So you can even sell the EURUSD pair without waiting for the data. In addition to the euro, today we will sell oil, a pair of USDJPY (above 112), buy GBPUSD with small stops, and also look for opportunities for buying gold.
Short
by Trade24Fx
Apple’s panic, German disappoint, inflation dataThe main event of yesterday, which set the pace for the dynamics of the main financial markets, was Apple's announcement that the company was unlikely to be able to achieve its sales forecasts. The reason is, of course, the coronavirus epidemic in China. The news, in general, is obvious, but since the madness of total optimism has long owned the markets for a long time, investors did not want to face facts to the last - China's problems are problems of the whole world. And Apple essentially stated this. Against this background, gold rose above 1600. However, we recommend buying gold for a long time and persistently and so far do not see any reason to change the vector. We note that the yen continues to remain in place. Although given the disastrous GDP data that we talked about yesterday, this is not strange. Nevertheless, sales of the USDJPY pair continue to be a promising deal, at least until it is below 110.20. The epidemic, meanwhile, continues. According to the results of yesterday, +1900 newly diagnosed and about 100 deaths. So, although the growth rate of sick and dead is decreasing, it is still high enough to restrain China in its attempts to return to a full recovery in economic activity. Another unpleasant news yesterday was the publication of the ZEW expectations index for Germany. The data came out extremely depressing: +8.7 points with a forecast of +21.5 points and a January value of +26.7 points. The largest economy in the Eurozone is rapidly following Japan towards a recession. For the euro, this was another blow that sent the single European currency to the lowest mark since 2017. In general, the euro situation looks worse than ever, so we continue to sell EURUSD, EURGBP and EURJPY pairs. There is still much to fall. Data on the labor market in the UK came out pretty good yesterday: employment was higher than expected (+180,000 with a forecast of +148,000). In addition, the pound was supported by the new Minister of Finance of the United Kingdom, Rishi Sunak, who announced that he would submit the budget, as planned on March 11. Recall that the markets expect him to expand government spending and investment. Overall, pound purchases remain one of our favorite trading ideas. But when buying a pound, do not forget about the key risk for it - news from the fronts of trade negotiations between the EU and the UK. Today, in terms of macroeconomic statistics, it will be interesting for inflation data for a number of countries, including the UK, the USA and Canada. Markets are now extremely vulnerable to inflation statistics, as rising inflation will be a signal for central banks to curtail ultra-soft policies.
Long
by Trade24Fx
Recession in Japan, China's stimulus and UK’s dataPerhaps the main event and surprise of yesterday were the devastating data on Japan's GDP for the fourth quarter. The country's GDP fell by 1.6% (the forecast was a decline of 0.9%) in terms of q/q and 6.3% in relation to the same quarter last year (the worst result since 2014). This is a very alarming signal for the global economy because Japan is the third-largest economy in the world. And although the reasons for such a failure are generally justified - a destructive typhoon and tax increases, the picture does not become less depressing. Given that China is Japan's largest trading partner, there is every reason to expect weak data in the first quarter of 2020 (consequences of the coronavirus epidemic). Do not forget about the loss of the tourism sector in Japan from China's ban on the travel of citizens. We are talking about hundreds of thousands of tourists from China who were supposed to visit Japan but did not visit with all the ensuing economic consequences. The second consecutive quarter of GDP decline is already officially a recession. That is, what we have been talking about for quite some time in our reviews is beginning to take on an increasingly clear line. What is characteristic, the Japanese yen against the background of such crushing statistics were not exposed to sales. Obviously, the demand for a safe haven asset in her person outweighs the desire to sell the yen to work out weak data. In this light, our desire to buy gold only intensified. Purchases of the Japanese yen, despite such weak data, also look good from current points. China, meanwhile, maybe trying to generate optimism after several weeks of continuous negativity. And this is not only about the statistics on the epidemic, which is beginning to decline but also about the position of the Chinese authorities, who yesterday promised to strengthen the stimulation of the economy in order to compensate for the negative consequences of the coronavirus. It is planned to reduce corporate taxes and increase government spending. Despite this positive, we believe that the damage has already been done and the world economy will still feel it in the first quarter. And the epidemic itself is still ongoing. According to experts, the Chinese economy will return to less or less normal functioning no earlier than in a month. In this regard, we recall our recommendation to sell oil. Demand for oil from China continues to fall, and refinery loading drops at a gigantic pace (at some plants, the decline was 10-20%). According to Citi analysts, the total volume of oil refining in China fell by 2 million barrels per day, while oil demand in China in February may show a decrease of 3.5 million BPD. These are very serious figures for the oil market. So we use any attempts to grow the asset as an occasion for its sales. For the British pound today is a pretty important day in terms of macroeconomic statistics - a block of data on the UK labor market will be published. In the past couple of days, the pound has somewhat lost its fuse, which was received in the form of promises to increase government spending. Today's data can either increase pressure on the pound, or give it the opportunity to return to growth. So we follow the numbers and adjust the positions depending on the nature of the data.
Short
by Trade24Fx
Week Results: China, the euro and oil problemsThe past week has already habitually passed in the analysis of news around the coronavirus. The main result was the restoration of economic activity in China, which greatly reassured investors, and they returned to the usual occupation in recent years - the purchase of risky assets. As a result, US stocks updated historic highs. At the same time, one cannot but note the opposite trends - gold was in stable demand, but oil was under pressure. This already indicates that investors are seriously worried about the consequences of the epidemic, which are primarily manifested in a sharp decrease in demand for energy assets (the International Energy Agency even predicted the first quarterly decline in oil market demand in 10 years). Investor fears are much easier to understand than optimism in stock markets. Fears are something rational: it is not clear what real economic damage China and the world as a whole will be caused by the epidemic. Do not forget that the root of the problem may lie not even in the fact of a slowdown in economic activity, but in the ability of China to service its debts, which have already reached 300% of GDP. And the epidemic is still only growing: the number of deaths has approached 1700, and the number of infected has exceeded 50,000 (according to WHO). But optimism is something from the field of irrational and emotional. Since we believe that, in the long run, proponents of a reasonable assessment of the markets will be right, we, therefore, continue to recommend sales on stock markets as well as purchases of safe-haven assets. Speaking of sales in the US stock market. The Federal Reserve Bank of New York announced that they will reduce the volume of interventions in the repo market. That is, cash injections will decrease. Which is very likely to provoke a decrease in demand in the stock market. In addition, this week we will look for opportunities for sales in the oil market. At least, if there is no news that Russia has decided to support Saudi Arabia and agrees to increase the volume of reduction in oil production. Well, or the epidemic will rapidly decline. In addition, this week we will continue to look for points of sale for the euro. The single European currency after a series of weak economic data, including a failure in industrial production, and close to zero GDP growth Euro zone looks extremely vulnerable. As for macroeconomic statistics this week, on the whole we are waiting for a relatively calm period. So, the markets will continue to follow the news from China and work out them first of all.
Short
by Trade24Fx
China comes back to life, experts calculate lossesChina yesterday began to actively restore economic and industrial activity in the country. Judging by official figures, the epidemic has begun to decline, so there is reason to believe that the worst is over. In this light, yesterday's growth in demand for risky assets is generally explainable. Perhaps the global economy in general, and China in particular, will get off easily. At least Bloomberg analysts believe that the impact of the epidemic on the economy will be extremely short-term. Although they note, in the first quarter of China's GDP growth will slow down to 4.5%. In general, the uncertainty with economic damage is likely to be a factor restraining another bout of unbridled optimism in the financial markets. The fact is that its scope can be more serious and tangible. For example, Simon McAdam from Capital Economics believes that the coronavirus will cost the world economy $ 280 billion and ultimately lead to the fact that the world economy in the first quarter of 2020 will not grow for the first time since 2009. JPMorgan analysts expect China’s GDP to grow by only 1% y/y in the first quarter (they predicted an increase of 6% y/y before the epidemic). Goldman Sachs expects the coronavirus to subtract 2% from the global GDP. And Morgan Stanley recently proposed how to measure the real extent of the downtime of the Chinese economy - by analyzing the level of air pollution. According to their calculations, air pollution in Guangzhou, Shanghai, and Chengdu is only 20-50% of historical values. This may mean that human activity here (transportation and industrial production) is only 50-80% of the usual. In general, the optimists or pessimists will determine the dynamics of prices in financial markets on who ultimately turns out to be right. Uncertainty just hangs in the air, which means that for now, it is better to trade inside the day with small stops. We will look for points to buy gold and the Japanese yen intraday. We will sell oil at the time of its growth. Also, we will buy the British pound. Yesterday's data on GDP (+ 1.1% y/y against the forecast of 0.8% y/y) and industrial production (+ 0.1% against the forecast + 0.3%) did not give rise to sales and important support 1,29. So, a rebound up is quite likely.
FOREXCOM:XAUUSDLong
by Trade24Fx
4
Oil and world are in danger, a pound in anticipationTraditionally, we start the review with news about the coronavirus epidemic. Once again, we note that the matter is even on its scale - thousands of times more people die from ordinary flu, and hundreds of thousands of times more get sick each year. The point is the problems that this epidemic has on the global economy. A number of key industrial centers in China have been completely or partially idle for the third week. Each such day is further destruction of the global supply chain, and if there are still enough stocks in warehouses, then every day the risk of a shortage of materials to continue the activities of companies becomes higher, as well as the scale of losses. One of the main victims this week maybe oil. We wrote that last week OPEC+ was able to tentatively agree to reduce oil production by another 600K b/d. But yesterday information appeared that Russia could refuse this. And here, even in Libya, the warring parties are close to signing a peace treaty, which is fraught with the return of several hundred thousand barrels per day to the oil market. And all this is happening against the backdrop of a sharp drop in oil demand from China. Not surprisingly, some experts predict an oil drop of at least 10% in the foreseeable future. In general, oil sales this week remain our basic trading idea. Returning to the current figures on the scale of the epidemic, we note that the number of deaths is approaching 1,000, and the number of cases is close to 50,000. Once again, we recall that these are official statistics. The main mass of experts converges in opinion, that the figures are underestimated by several times to several tens of times. In connection with such a development of events, we cannot but recall our recommendation to sell the Russian ruble. The conditions for this are almost ideal, especially when you consider that the Central Bank of the Russian Federation lowered the rate again last week and plans to do this further in 2020. Today, in terms of macroeconomic statistics, it will be interesting primarily for the British pound. Data on GDP and industrial production can trigger a surge in volatility in pound pairs. Given that in recent days, the pound was already under strong downward pressure, weak data will almost certainly trigger a new wave of sales. But at the same time, good numbers can give a start for strengthening the pound - points for its purchases are very attractive. In general, today you can try news trading, with pending orders or enter after the news, playing back a fundamental positive or negative.
Long
by Trade24Fx
NFP Day, Coronavirus Chronicles, Pound WeaknessThe main event of today will be the publication of official statistics on the US labor market. On average, experts expect a gain of 162K. This is more than it was in the previous month, but less than the average value for the last couple of years. In general, it is worth noting that the trend towards a decrease in the number of newly created jobs with each new publication of data is becoming increasingly apparent. After the peak values of 2014 (then about 3 million new jobs were created during the year), the indicator was constantly decreasing, with the exception of 2018, when Trump's tax reform affected, but already in 2019, the effect had exhausted itself. So the US labor market in 2020 looks rather vulnerable. Especially in light of the coronavirus epidemic, which continues to gain momentum: the number of deaths is close to 600, and the number of deaths is close to 30,000. Quarantine continues, and more and more countries completely or partially interrupt a transport connection with China. In this light, data on the US labor market may well be unpleasantly surprising. The only thing that holds us back from frankly negative forecasts is the excellent employment figures from ADP (+ 291K). Although they can play a trick on the dollar because against the background of such numbers, almost any statistics on the NFP will seem weak. In total, we will not be surprised at the weak NFP figures, but we would not dare to put on this forecast. Instead, we offer traditional news trading in a pair of USDCAD. Recall that in parallel with the data from the United States will be published statistics on the labor market of Canada. That is, the USDCAD pair has a chance of a double impulse with no obvious direction. So a minute before the publication of data, we place pending orders such as stop orders for purchases and sales at 20-25 points from the current price at that time. And just waiting for the data. If there is a situation with data overlay (positive for the Canadian dollar and negative for the American or vice versa), then we remain in position until the end of the day. To other news and events of yesterday. In the foreign exchange market, the pound was under pressure amid growing investor concern over the outcome of trade negotiations between the UK and the EU. We believe that the parties will agree. In the end, the United States and China were able to enter the first phase, let alone Britain and the EU. So pound purchases remain one of our favorite forex positions. For other assets and markets, buying gold and the Japanese yen is still a priority. But with oil we, perhaps, will wait a while. The asset can not decide who it is - buyers and sellers - so we'll wait for more clarity. Moreover, Saudi Arabia and Russia have been agreeing on something for three days. The outcome of the negotiations could potentially blow up the oil market.
Long
by Trade24Fx
2
The markets illogicality the and trading anomaliesTuesday was another recovery day in the financial markets. In general, all this is rather strange and illogical. Markets first fall on the news of coronavirus and the epidemic. Logically and explainable, we will not go into details, and once again build logical chains of consequences. We did this in previous reviews. But upon the receipt of news that the epidemic is developing and becoming the largest in the last 20 years (the number of deaths exceeded 400, and the cases of 20,000), markets begin to calm down instead of continuing to work out a fundamental negative. This can be seen from the dynamics of the stock markets (Nasdaq updated new historical highs, and Tesla shares seem to have forgotten what gravity and common sense are), gold is declining, risky assets are recovering, VIX Fear Index is falling by more than 10% in day, and the Chinese stock market is adding 1-2% per day. The main problem in this chaos is not to lose one’s head and not to succumb to general madness. Ultimately, you need to work not with current prices and their dynamics, but with facts. And the facts are that the epidemic has already caused enormous damage and will continue to cause it. Yes, the extent of the damage is unclear and perhaps it will be partially leveled in one way or another. But it is applied and this is a fact. So, starting from the facts, we consider current prices in the financial markets to be abnormal. Based on the concept of “regression to the average,” prices will sooner or later have to return to their moderately adequate state. Accordingly, today we will buy gold with redoubled energy and volumes (for less aggressive traders, we can recommend selling a pair of USDJPY - the points for sales are simply excellent). Stock market sales remain our No.1 trading idea. Oil sales (WTI benchmark) from 51.20 also seem to be a balanced transaction (stops above 51.20 with profits in the region of 45 or even lower make the transaction extremely attractive). At the same time, we are acting with an eye on OPEC activity. If the cartel decides to intervene, and oil goes above 51.20, then a stop coup is quite possible. Speaking of other news and macroeconomic statistics, we note that today will be published US employment data from ADP. Although the focus of the markets is traditionally focused on the official figures, which will be published on Friday, strong deviations in the fact from ADP from forecasts can provoke significant movements in dollar pairs.
FOREXCOM:XAUUSDLong
by Trade24Fx
2
Markets relax again amid concerns over global economyMonday was a very busy day in the financial markets in terms of price dynamics. The tone was set by China, which opened its stock markets after a long vacation. Expectedly, the market collapsed despite unprecedented restrictive measures by the Government and an infusion of nearly two hundred billion dollars from the Bank of China. The Shanghai Composite Base Index lost $420 billion in value over the day. Experts, meanwhile, note that China is well suited to act as a catalyst for a new global crisis (until recently, the States have done it well). The fact is that in recent years, the role of China in the global economy has grown dramatically. Today, it accounts for about a third of world growth, which is more than the share of the United States, Europe and Japan combined. So if Goldman Sachs analysts are right (they forecast a decline in China in 2020 at 0.4%), then the global economy will face serious problems. Despite the sales in China and the next anti-record coronavirus epidemic, investors again relaxed and calmed down. This already happened last week and turned out to be nothing more than a pause in the main movement. So, such gold descents as yesterday, we recommend using the asset for purchases. Moreover, by itself, the gold market could face a shortage. The fact is that the volume of gold mining in the world in 2020 decreased for the first time in 10 years. All easily recoverable metal has already been mined, which only strengthens the current negative trends for the offer of an asset. The pound dipped well yesterday. Although not the fact that this is its absolute minimum. The fact is that Great Britain and the EU, after the official withdrawal of the first from the Union, switched to the most important thing - the trade agreement. And then, predictably, the parties faced a problem. However, we have already gone through all this over the past 3 years. The parties will exchange threats, raise rates, put pressure on each other in an attempt to win the most favorable conditions for themselves. Given that the period until the end of the year, the pound is waiting for a difficult 8-9 months. We continue to believe that the parties will agree on how this ultimately happened with Brexit. And so we will use the pound's descents as an excuse for his purchases. At least the point 1.2980-1.3000 looks too attractive not to risk buying from it. But with mandatory stops, because it is likely that the pound can be bought even cheaper. Oil (WTI benchmark) yesterday fixed below the support of 51.20. In general, the situation looks rather threatening for buyers, especially since the background is generally favorable for further sales (oil demand in China collapsed by 3 million b/d, which is about 20% of its total consumption).
Long
by Trade24Fx
The epidemic continues, Carney's last word, Brexit dayAs we warned in our two previous reviews, investors relaxed clearly prematurely. Actually, the dynamics of underlying assets on Wednesday confirmed this. And the front pages of publications clearly indicate what investors should think and worry about now - the coronavirus epidemic. Yesterday we wrote that its scale has already exceeded SARS, and the epidemic is still in full swing. The number of deaths has already approached two hundred, and the number of cases is clearly aimed at overcoming the 10,000 mark. Meanwhile, analysts are accelerating the theme of global recession and coronavirus as a trigger. We already wrote earlier that there are prerequisites for this and current events are really great for the role of a catalyst. In general, our recommendations on buying safe-haven assets are still working and their decline on Tuesday was only a great opportunity for cheaper purchases. But back to the events of yesterday. The Bank of England left the bet unchanged. Since the price of the pound at the start of the day partially took into account a possible decrease in the rate, its increase upon the announcement of the decision by the Central Bank was an attempt to exclude this component from the price equation. Actually, our recommendation to buy the pound worked at 100%. For the current head of the Bank of England, Mark Carney, this was the last meeting. Already in March, he will be replaced by Andrew Bailey, who previously served as Executive Director of the British Financial Supervisory Authority. Well, do not forget that today is Brexit day. On January 31, 2020, Great Britain leaves the European Union. Note that Brexit was and remains the main driver of pound movements. Moreover, it is precisely the “soft” scenario that is being implemented. Recall that when the markets were just thinking about the possibility of a “soft” Brexit, the pound was worth 1.41-1.43. From this position, its current prices look like great opportunities for medium-term purchases with very ambitious goals. The US GDP for the fourth quarter was 2.1%. Overall expected as it was the final reading.
Long
by Trade24Fx
12
Effects of the coronavirus grow as panic in marketsThe coronavirus epidemic is gaining momentum. At least, according to statistics. The number of deaths is already close to 100, and the number of cases is close to 3,000. China is forced to react harder. The magnitude of the effects on the economy is growing exponentially. Lunar New Year celebrations are extended for at least 3 more days. Actually, more than one review can be devoted to the chronicles of the coronavirus and attempts to assess their consequences. But we are still more interested in the reaction of financial markets and how to capitalize on this force majeure. Panic in the financial markets after the weekend intensified. The Fear Index (VIX) literally skyrocketed, increasing by more than 40% in a couple of days! So far, everything is developing exactly with our recommendations: safe-haven assets are growing in price, stock markets have rained down, risky assets like the Russian ruble are losing, oil and other commodity assets are continuing to decline. So further deterioration of the epidemic situation will obviously be accompanied by the development of these trends. Therefore, the basic trading plan is still unchanged: we buy gold and the Japanese yen, sell the Russian ruble, sell shares. As for oil (WTI brand), the support we outlined 51.20 +/- is clearly the goal of the current movement. If events will develop as they develop, and the asset will be able to break through this support, then oil sales may well become uncontrolled. But until this happens, 51.20 seems to be a good point for shopping (for aggressive traders, conservative in place, we would wait until the markets calm down). Today, quite important statistics for the United States will be published (orders for durable goods and the level of consumer confidence), but let's be realistic - everyone is not up to it now.
Short
by Trade24Fx
RH - positive and likely uptrend continuation - cyclic toolsNYSE:RH This time its time to look at RH RH has been moving upwards and forming an uptrend since early June 2019. A quick look on the chart and we can establish a few key support/ resistance lines Support 1 : 218.23 Support 2 : 206.60 Support 3 – 192.12 Support 4 : 171.34 Resistance – Stop buy entry level : 228.72 Resistane 2: 243.84 There seems to be chart formation happening. On breakout above 229, one could expect a continuation of trend Upward Price target- 270 Interestingly, price seems to be making a trough or a intermediate corrections on the trend every 14 days. If this is the case, then yesterdays price close could be a near time low for the 14 day cycle. Next important day to look for is 30th Jan and then 13th Feb 2020 for next low on the cycle. Interesting times ahead given that US and China trade wars seems to be moving in the positive direction Please note this is not an offer to advisory, please consider account size and risk management tools If you like what you see, please share a thumbs up!
NYSE:RHLong
by LoveForCharts
[ Short ] Cathay PacificLiving in Hong Kong, I am seeing the protests re-emerge literally outside my flat. I do believe this will have a continued impact on tourism here in the S.A.R.; notably from Mainland Chinese. HK Tourism I believe the move which began on 8 OCT is a result of the "Phase 1 of the Trade Deal." ( same day as Trump started it ). While I believe greater "USA election related progress" will be made on that front, the protests are not stopping & have been / exp. to continue to have a direct impact on this particular equity. As of now, this ~3 month retracement represents a ~1.5 standard deviation from the mean looking back on the past 20 Yrs. Further relevant items below: Would love to hear any / all comments & suggestions; notably on the Target / Time Horizon albeit any / all would be appreciated. Cheers.
HKEX:293Short
by sobcza123
1
VIPS run should continue after pullback from overboughtChinese retailer VIPS has been on a massive run lately, and is now pulling back from overbought on the weekly. The stock has formed two upward trend lines, one steeper than the other. We may break the steepest trend line and bounce from the secondary one. VIPS started 2019 at a low valuation, and over the course of the year has seen a roughly 100% increase in its earnings forecast. The share price has risen accordingly, but the stock remains significantly undervalued according to S&P Global Intelligence, with a valuation rating of 86/100. VIPS has posted huge earnings beats on its last five earnings reports. The company next reports earnings on February 18, 2020. Judging from the current earnings forecast, I judge that the share price is likely to hit $30 per share by 2021. The stock has a 9.5/10 analyst summary score and fairly bullish options volume even after the huge run it's been on.
NYSE:VIPSLong
by ChristopherCarrollSmith