Financials will benefit if the reflation theme continuesRelated to the reflation theme described in my view "Crude Oil: The Most Important Chart in the World".
This trade relates to a steepening of the US yield curve as rates adjust upwards through either rising inflation or a pickup in US growth (or both) having been driven to a record low in June.
BKX Index (candles)
BKX / SPX (blue)
US10Y (grey)
What is interesting to note from a technical perspective is that the BKX index traded within 1% of the 2007 - 2009 61.8% retracement level last July, before bottoming at the 38.2% retracement level in February this year. Since then, yields have continued to fall (grey), but the relative performance of banks versus the S&P 500 (blue) has held firmer and failed to make new lows.
Assuming the reflation theme transpires, banks represent a compelling value play and remain an uncrowded US equity play. Now trading below the $70 level, technically the banks are in the lower half of the last 12 month's trading range and provide a decent payoff in the run up to $80 (61.8% level) with a stop-on-close (weekly) below $57 (38.2%).
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Financials
XLF and Q2 EarningsQ2 Earnings season is starting in Monday, July 11th with major financial institutions reporting.
Financials are projected to do slightly better then the previous quarter and may offer good upside potential.
From a fundamental standpoint, most financials are undervalued when taking into account future interest rates.
If "Market Stabilization" occurs in Q2 or Q3, further revenue and earnings growth is expected from Trading Revenue.
Technical Analysis showing resistance points after a break through the strong trend ling.
AUDNZD WAITING ON BREAKOUT 4HOURBreakout out of critical level followed up by a retest of that level and 61.8% fib level.
Stuck in a ranging market since the beginning of the month,
just awaiting a breakout to the downside confirmed by the careful use of MA's.
Looking for a downtrend towards target 1 at 1.03602 (monthly critical).
Price action at this level will confirm my further position or to capitalise on profits made.
Upon completion of this level the next to the downside would be target 2 at 1.02406.
Relief Rally In Global EquitiesGlobal Equities are experiencing a relief rally after a bizarre turn on events. For some reason, the brazen murder of British M.P Jo Cox turned the increasingly large "leave" vote around, and the "remain" vote regained the led heading into Thursday's Brexit vote.
The Euro Stoxx 50 Index jumped off of technical support of 2,814 but still remains in a clear downtrend of 2015's bubble-high of 3,837. Since last year's top, the index has made several lower-lows, and the current trend from the bear market bottom has etched out two clear lower-highs.
Given the state of the brief risk aversion seen last week as the "leave" vote took a pronounced lead, global were "due" for a rebound. As alerted earlier last week, the near-term momentum was set for a shift:
twitter.com
If you look across European equities, the prospects are not turning out like many thought. In regards to the Euro Stoxx 50, price action does not get interesting until a close above the near-term, broken uptrend AND prevailing downtrend is confirmed. The 200-day EMA will be a key pivot point. The index has not been able to trade above this dynamic resistance since last December.
Wait for price to trade into resistance near 3,000/025. MacroView does not expect Britain to leave the European Union, but there are far too many risks to get excited about.
Check out Bloomberg's Brexit tracker, currently showing a small Brexit lead.
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WFC and other Financials Looking Grim WFC has been unable to gain 50.5-51 resistance for months now, and the chart may indicate that it is time to retest lower. the last weekly level retest was 44.59, which bounced strongly and reversed. if 46.6 is lost, we should look towards 43.2 for next support test.
Lower still is 41.65 and 38.03 as well as others, but these levels may not apply for some time
GNW - recovering fortune 500 giant, turnaround play of the yearGNW recovery play, Long at 3.08 as of 6/14/2016, target 6.50 or more by this time next year. GNW was hit by horrible guidance and earnings the previous year and is just starting to recover since the last earnings early May. It has stopped the bleeding in its LTC unit and is poised to make a turnaround. Rate hikes should help GNW as well. 82% of stock float is held by institutions and mutual funds, and multiple firms have been picking up position in the stock the last quarter. The current tradable float is small and will be very volatile on low volume. I'm long Jan 2017- 5 strike calls. Looking for 5 by September
#Dollar Showing Weakness, Intermediately OverboughtThe U.S. dollar went bid following rhetoric from Federal Reserve officials that a potential rate hike could occur in June, following hotter than expected inflation data.
However, after posting on pending technical weakness here, the dollar has retreated slightly over the last few days. Price action as traded neatly within a descending channel on the daily chart, and potential signals of another move downward are pending:
The daily RSI has broken through an indicator support level, and the stochastic indicator is signaling a highly overbought condition. If price price action continues to falter, a sell signal below 80 could trigger selling pressure.
The DMI is about to form a bearish convergence, which would indicated bearish price action will take over.
In order to regain upward momentum, the DXY would have to close above channel resistance near 95.66; 96.55 will be key resistance point in order to challenge 98. If selling pressure does occur, DXY will likely seek out 93.80 (50% fib retracement from current minor uptrend)
The long-term macro dollar theme continues to be deflationary. It is important to note, a spike in inflation has been a late cycle occurrence. Every U.S. recession since the mid-1950s has seen an increase in inflation (after previously declining).
We must also include that as the global economy continues to slow, global central banks will look to continue monetary easing this will at least support the greenback. Furthermore, as the U.S. economy rolls over, a deflationary spiral is expected to occur.
MacroView is still expecting the U.S. economy to reach recession between Q2-3 once final data revisions occur.
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XLF- Which way to goI'd say closer to a short than a long, but we still need a clearer picture. A break 24.5/25 would be bullish, a break below 20 or so, bearish. THink we will move one way or the other in the coming months based on important fundos such as Spanish Election, Brexit, US election, China, etc.
TKAT Research Report - Fast Growth Rate, High Profit Margins ectCompany Name: Takung Art Co., Ltd.
Stock Symbol: TKAT Company Website: www.TakungArt.com
Trading at approx $3.60 Per Share (03/29/2016)
Several reasons I like this company. TKAT has a very attractive valuation, fast revenue growth rate, high profit margins and a truly innovative business model. Overall the company appears to be in a great position after reviewing their financials and 2016 statistics which I will go over.
-For the first two months of 2016, Takung’s online trading platform generated U$493.43 million in transaction value versus $140.84 million in the like year-ago period.
-The company reported revenue of $11,335,941 for 2015, which represents a 140% increase on revenue of $4,719,862 in the prior year.
-The company reported net income of $5,436,109, for 2015, a 297% increase on net income of $1,369,537 for the prior year.
-Cash on hand as of December, 31 2015 was $10,769,456 and total assets stood at $29,749,213
Its reasonable to see this growth continue after seeing the impressive quarterly and annual trend for the past 3 periods. Aside from the positive trend, a key thing to consider is their growth rate with their high net profit margins and how they generate revenue.
Annual: 2015 / 2014 / 2013
Revenue $11,336,000 $4,720,000 $359,000
Net Income $5,436,000 $1,370,000 $4,000
Quarterly: Q4 2015 / Q3 2015 / Q2 2015
Revenue $6,419,000 $2,706,000 $936,000
Net Income $3,721,000 $1,144,000 $77,000
TKAT is fairly new to the public markets, low market cap and many investors don’t know about the company yet but could get very interesting once the word is out. I’ve ran multiple google searches of multiple phrases which relate to their business model and I’m not able to find any companies especially publicly traded with similar business operations. I urge you to watch this Reuters Video www.reuters.com which gives a clear understanding of their unique and innovative business model, technology, including some words from the CFO and a Director. Also feel free to visit the company website to learn more or read the10-Kwhich goes into more detail. I’ll be sure to provide more updates as they come and additional research.
Business Overview:
Based in Hong Kong, Takung Art Company Ltd. provides a secure and easy way for art collectors and investors to acquire shared ownership in Asian fine art – including paintings, calligraphies, jewelry and precious gems – and participate in the booming Asian art market without fear of price manipulation and forgery. This proprietary platform allows collectors and investors – including those with modest financial resources — to buy and sell units of these assets and participate in the booming Asian art market.
For providing this unique service, Takung Art Company earns multiple streams of revenue, including listing fees, trading commissions, management fees and authorized agent fees.
Takung operates its online trading platform via three wholly-owned subsidiaries, Hong Kong Takung Assets and Equity of Artworks Exchange Co. Ltd., Takung (Shanghai) Co., Ltd., and Takung Cultural Development (Tianjin) Co., Ltd.
As of February 29, 2016, Takung had 64 such listings trading on its proprietary platform with a combined value of approximately US$270.28 million . Currently, almost all of the traders on the platform are located in mainland China. The ability to trade these valuable assets on Takung’s proprietary online trading platform has attracted a significant number of fine art investors – including many ordinary people without substantial financial resources. This novel platform significantly expands the number of interactions between sellers and buyers of fine art far beyond those generated by art galleries and auction houses alone.
ABOUT TAKUNG ART CO., LTD: www.takungart.com
Recent Media Coverage:
Full research& Disclaimer: www.stockpicksnyc.com
FXMM could be building a bullish 5 wave, or is it really?FXMM continues growth after breaking 1220 resistance. It is building a bullish 5-wave pattern unless it breaks below broken resistance point (dotted red). The bullish momentum can mark the start of the new uptrend that can last for several years and most likely complete wave 5 at 1.618 fib level(1301.09). A bullish breakout above this level could see wave 6,7,8,9 push to the next Fib targets. The support zone 1114.4-1090 stays valid. We most likely will retest this levels if the Elliott Wave pattern breaks. I will recommend to buy a break to the upside, with profit targets based on structure support.
The Dimon Bottom Hype Is OverCNBC has loved to refer the recent pullback in the SPX as the "Dimon Bottom" because CEO Jamie Dimon purchased roughly $26 million worth of JPM shares. However, it's not looking for those wanting to hold to believe in the recovery dream.
Whether investors want to believe it or not, the U.S. economic cycle is rolling over; and, considering the very high correlation to the SPX, J.P. Morgan shares will unlikely be saved.
Since 2014, I been warning of potential headwinds from energy exposure in U.S. banks. It may not cripple the sixth-largest bank in the world, but death by 1,000 cuts won't be any better for shareholders.
On Tuesday, JPM reported a 20 percent decline in trading revenues, as well as a $500 million increase in provisions (up 60 percent) due to their energy exposure. Fee revenues were down 25 percent.
Technically, the weekly chart is showing more downside is to come. Traders are watching a 20-weekly bearish convergence with the 50- and 72-weekly EMA. Price action is, also, currently below the 200-weekly EMA.
The inability to show support above this level and challenge $59.60 could poise further stress on shares.
Near-term, we'll see price action test the trend/price demand between $52.30-$53.50. A close below $52.30 would open up $48.3 and trend lower to $43.74.
If looking at Fib. retracements, a close underneath Aug 24, 2015 Black Monday low, 1.618 Fib. extension would stand at $37.54. This would be my target for Q2-17.
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Consolidation inside the PRZ - Butterfly completion near X BAC Bearish Bat pattern is still valid as the price consolidates inside the PRZ, below two broken uptrend lines.
As the markets await Yellen and the Fed, Financials are stuck and that clearly being reflected in BAC's chart.
If the price will attempt to rally and test the X zone (18.5$) it will complete a small Butterfly pattern that will add chances that we will see bearish reversal in BAC and a move towards 16.5$-17$
R/R shown in the chart (for two scenarios)
Tomer, The MarketZone
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Bat Still Valid - Can it hold? Despite Yesterday's rally in the stock markets, $BAC's Bat pattern wasn't violated as the price remained inside the PRZ,
The fact that the price climbed above the Fast SMA line and created a minor uptrend line is a bullish signal but as long as the price remains below the broken major trend line and below X (18.5$) the bearish scenario is still valid.
Assuming that we will see $BAC testing 18$ again, the R/R for the bearish setup is about 2.
More conservative traders should probably wait for the price to close below the Fast SMA line.. at least.
Tomer, The MarketZone
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Is it breaking out of a weekly Triangle? Since its 2012- 2013 uptrend line was broken $BAC has been trading inside what looks like a weekly Triangle pattern (see black dashed line and the 17.5-18$ structure zone shown in the chart)
During July, $BAC has completed a weekly bearish Bat pattern (PRZ between 17.8$ and 18.3$ that managed to stop, for a while, the stock's rally.
The pattern's targets are 16.8$ and 16$, but for now we see that the price is finding support inside the structure zone.
The question now is how will the price will react to the 17.5-18$ zone. A close above it, could mean a weekly breakout from the weekly triangle. A close above 18.3$ will also violate the bearish Bat pattern.
A close below 17.5$ can be interpreted as weekly False Break and signal that the price will head lower towards the pattern's targets and possibly the bottom of the Triangle.
As long as the price remains within the PRZ, I'm sticking with the pattern, despite the fact that we saw the price bouncing from 17.5$ (warning signal for bears)
The R/R is great and Bats usually are reliable patterns.
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BAC looks bullish & could b/o of recent consolidation to 20 lvl.Looks bullish here as it has been in a consolidation range ever since 1/14' and has for the most part been btw 15-18 zone. Financials have come back stronger this year and with interest rates set to be raised soon which could lead to better earnings from banks......financials are set to continue to be strong. For BAC.....it has been stuck below 18 lvls. ever since 09' bottom lows & 18 is a major resistence lvl. for it to close above and hold for a few weeks.......if it breaks 18 w/ volume & holds above it then it will have b/o to the upside of the consolidation range & continue the bullish trend w/ tgt.#1=21.50 & tgt.#2=24......as always watch volume for confirmation.
