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Taxreform

With meaningful stimulus coming, I'm swing trading the dipsToday Trump and Pence seemed to finally get serious about preventing a coronavirus recession, offering a payroll tax cut, a bailout of the cruise line industry, and a promise that coronavirus patients won't have to pay for testing. Admittedly these things are small potatoes compared to the scale of business disruptions that may be coming, but it was meaningful enough to reduce the PredictIt odds of recession in Trump's first term from 61% to 53%. The cruise line bailout suggests that similar bailouts may be coming for airlines, energy companies, and banks if necessary. Especially as the S&P 500 approaches its ten-year trend line, I am going to be looking at buying any large dips on the theory that additional panic selling will trigger additional panic stimulus from an administration finally waking up to the political risk of an election-year recession. I will not be playing with all of my funds, obviously. This will be risk on the order of 10-20% of my portfolio. (I already made a profit from this strategy today by buying near the mid-day low.) I wouldn't be surprised to see today's rally continue tomorrow, although the after-market movement in oil isn't promising. But even if tomorrow does turn out to be a green day, the coronavirus fear is growing as the disease spreads in the US. More downside is coming soon. I wouldn't chase today's rally; the SPX is bound to dip back toward that 10-year trend line in coming months as US economic activity continues to grind to a halt.
SP:SPX
by ChristopherCarrollSmith
Opportunity to short S&P 500Every one on the Street talks about incoming crisis and 5%+ downtrend for main US indexes. I suppose every trader should use such opportunities and open corresponding short positions. What we have for S&P today? 2017 and January 2018 made it extremely overbought - RSI was on 86, the last time we saw these levels during 1980 rise, and it was followed by 21% correction. Bad news from Apple (3.5% of the whole S&P) and unjustified tax expectations made the trend line breakout, with a wide gap. RSI has approved the signal by breaking through 70 (the most reliable RSI signal). Combing these factors all together I see a safe trade opportunity and open a short position. The best tactic for TPs is to close step by step. I am going to do it in three steps, as I show on the graph. I also put my SL very closely, because we still have a bull market, and I don't want to take additional, very possible risks.
SP:SPXShort
by ArtKon
Short GBPUSD Trading IdeaUSD Bullish Rationale : 1. Optimism tax reform bill 2. It's been said that the market have fully priced in December interest rate hike but this "certainty" seems to ease investors in betting Dollar strength at the moment 3. Personally, I see no reason as of now to be bearish the dollar GBP Bearish Rationale : 1. Continued uncertainty and MESS over the brexit divorce deal 2. Another mess over the Irish border 3. Lack of tier-1 event to help boost the Sterling today Factors could invalidate the trading plan : 1. Positive development on the brexit divorce deal 2. Any geopolitical issues comes up such as the North Korean missile stuff etc etc Levels to trade : A. I would prefer if the price make another test on today's daily pivot. I will seek reversal signals or structural break and short the pair from here. The rationale of the target price (TP) is a) within the average daily range b) It has been tested and respected before c) Missed Pivot B. In the event where price could pierce through the daily pivot, this level is where I would find technical reasons to short the pair such as reversal candlestick and/or structural break and/or the old fashion (but still effective if used properly : Moving Average crossover!). The rationale of the target price (TP) is a) within the average daily range b) It's potentially today's low
Short
by sufiansaid
Short EURUSD Trading IdeasThe tax reform potentially will be the major theme for the dollar today. Even if price goes all the way to Friday's high, I will see that as technical correction before investors buying the dollar again. A break beyond that will invalidate my trading plans. The rationale for "bearish" the Euro today is the lack of fresh news/catalyst for the Euro currency. Risk for this trading plan : 1. A development on the Flynn vs Trump saga (eventhough it has been established that is is indeed "fake news") 2. A development on anything that negates the positivity of the recently passed Tax Reform 3. Trumps crazy tweets! 4. Anything significant from the Eurogroup Meetings
Short
by sufiansaid
A time for friendship Fiscal Reform in the US The Republicans failed to agree on Thursday so they postponed voting on the bill on Friday. Because of the minimal edge, the vote of every Republican is important for success of the reform, that’s why senators have to seek for a tradeoff with the "fiscal hawks", who see an acute problem in expansion of the budget deficit as a result of the tax cuts. Nevertheless, it is not clear at all whether the Senate will be able to reach constructive agreements on Friday. The dollar was able to recover losses, and stock markets rose after supporters of the bill were able to get Senator John McCain into their ranks, which, incidentally, opposed to the failed healthcare reform. Yields on US debt securities rose due to upbeat data on inflation and unemployment claims in October. The market expects a rate hike in December and several increases in 2018. The oil market The meeting in Vienna ended with extension of the pact until the end of 2018, leaving a hole for reviewing the agreements in June 2018 in case the market feels very good. In my opinion, the second condition was the key result of the meeting showing high confidence of OPEC in a friendly behavior of its rival - American oil shale companies. However Russia looked at the reverse side of the problem - getting out of the deal so as not to stay out of the way if the shale companies begin to behave aggressively. This can again lead to a collapse in the market. It remains unlikely that shale companies will dramatically increase investment to increase production. Most likely we will see an increase in dividend spending for waiting-too-long shareholders. Aggressive behavior is likely to be condemned because it will doom companies again for price wars and cut profits that shareholders are unlikely to tolerate. In addition, the industry has a high level of debt financing, which also significantly reduces the safety of shale companies in the competition with OPEC. After a slight correction, prices again have room for growth in the direction of $70 per barrel. Catalysts, as usual, will be supplies outages in various regions and improving demand outlook. Arthur Idiatulin
FX:UKOILLong
by Tickmill
USDCAD sellHi guys those who watched my video probably remember me saying, 'I'm repeating myself, the USDCAD is lagging and I expect to see that third leg lower. The upside was limited as I explained. For those who are not in the short-trade yet, wait for a consolidation that confirms the move lower. My minimum target is still 1.26. A note; as most of you know, I combine structure analysis and time analysis. In terms of 'time'; the minimum requirements of the correction on daily time frame have been completed. This means: there is a confirmed unique bullish wave on daily time frame which is over.
Short
by TimStuyts
2
Long USDJPY Trading PlanRationale for the plan : 1. 'Hawkish' statement from Powell 2. Equity markets as of now is positive. Potential Risk-On mode today. 3. Technical Sentiment is bullish USDJPY as price making higher-highs /lower lows since testing 110.900 handle R isks for the plan (that could invalidate the plan) : 1. Poor U.S Prelim GDP numbers later (Forecast 3.3%, Previous 3.0%). 2. Escalation of North Korea Missile test issues, which would potentially shift the market into risk-averse (Safe Haven flow - Yen will strengthened) 3. Any negative language came out from tax reform news
Long
by sufiansaid
Short EURUSD Trading PlanRationale to short EURUSD : 1. Market pricing in the positive progression on German politics (coalition), lack of fresh news coming out of it, I am neutral on Euros right now (but keep my eyes peeled for the German CPI) 2. The "hawkish" statements by Powell, it should make the dollar supported for the day at least. 3. Technically, EURUSD making a lower-low price structure, so technical sentiment for me aligns with the fundamental sentiment today. RISKS for this plan (which could invalidate the plan) 1. Germany Prelim CPI numbers is stronger than expected (Forecast : 0.3%, previous 0.0%). Even if the number 0.1% (more than previous), it could move the Euros upwards. 2. Any negative language came out from tax reform news 3. OPEC meeting today. USD can be pressured if oil price rallying (ripple effect from USDCAD) 4. and sooo many things we could never foresee...
Short
by sufiansaid
2
OPEC and US Senate may disappoint dollarEuropean stock markets followed their Asian counterparts on Monday as the US economy returns in sight, in particular the fate of the tax reform. Gold is rising against the backdrop of increased risks before the resumption of discussion of the tax reform in the Senate. The asset has risen in price by 0.5% to $ 1.293 and looks determined to reach another round $1,300 mark. Traders record profits on WTI on Monday after a significant increase in quotations last week thanks to declining supplies to the US market from the Canadian provinces. Uncertainty surrounding the outcome of OPEC rally which will be held on Thursday also forced investors to cut long positions on black gold. The current head of the Federal Reserve, Janet Yellen will address the Joint Economic Committee in Washington on Thursday, which is worth paying attention for dollar bulls which are losing their grip on the American currency. Also this week, hearings will be held on the appointment of Jeremy Powell, the successor to Yellen, who defends the position of further deregulation and a more modest pace of tightening of monetary policy. On the economic front, data on consumer confidence in the United States, the trade balance and the assessment of industry and unemployment from ISM can be of interest. The dollar index fell sharply to the level of 92.60 and is set for a further fall, as doubts about the tax reform are becoming the main theme of market sentiments. EURUSD is growing steadily to reach 1.20, despite warnings from ECB officials last week that the economy still requires significant credit incentives. However, almost all the macroeconomic statistics of the eurozone exceed expectations, including key leading indicators, such as business sentiments and consumer confidence. The US currency is losing more and more against defensive assets, such as the Japanese yen, the franc and XAUUSD, which indicates an increase in concerns over the resolution of major uncertainties, such as tax reform and the OPEC decision on Thursday to extend production quotas. Brent slightly increased, serious attempts to continue growth are not expected before the decision of the cartel on Thursday. Arthur Idiatulin
Long
by Tickmill
1
Shale producers gain foothold in US as Canada supplies dropNotices of doubt EURUSD is stumbling on the spot today, swaying around the range of 1.17-1.18, the market did not allow to spread pessimism associated with the political problems in Germany, as well as optimism associated with the tax reform. The US is preparing to celebrate Thanksgiving, in this regard, the senators have postponed the discussion of large-scale fiscal stimulation until next week. The economic calendar is stingy for important events, but the durable orders data, which release is due later today, will tell investors about consumer sentiment and their confidence in the future. The indicator is expected to grow by 0.4% in October, but given the past storms, data may exceed expectations, which will positively affect the US currency, which so needs a support. It will also be useful to look at the forecasts of inflationary expectations from the University of Michigan. Weak data will add to the anxiety stoked after Janet Yellen concerns on inflation, who alarmed the market on Tuesday saying that she is «very uncertain» whether inflation rebound is around the corner. In general, willy-nilly, hopes are again being turned to tax reform, since Federal Reserve officials hint that the effect of natural disasters may not last long. Supply disruptions and some data on bankruptcies. Oil prices sharply strengthened on Wednesday, in particular WTI grew by almost 2%, as traders hastened to price in a drop in the flow of Canadian oil in the US, as well as a sharp decline in commercial reserves according to the API. The Canadian company TransCanada Corp reported that it will reduce supplies to the US by 85% on its Keystone pipeline of 590K barrels per day, which fact could not but please shale producers. The pipeline that connects the oil sands of Alberta in Canada with refineries in the US was also closed after a spill of 5,000 barrels in South Dakota. Commercial inventories in the US fell by 6.5M barrels according to the API report, but the data should be confirmed by EIA today. After a short pause in July, oil firms in the US continued to capitulate. In the third quarter, the default on debt was announced by six companies. In October, the largest number of bankruptcies occurred, in particular, the large service company Castex Energy Partners filed for bankruptcy, which debt amounted to 404 million dollars. This is the biggest bankruptcy for nine months. Nevertheless, compared to last year, when the market left only 64 companies in nine months, this year for the same period only 22 companies retired from the industry. Arthur Idiatulin
FX:USOIL
by Tickmill
May dismissal may breath new life into sterling Oil market Oil traders have not yet decided on further price direction, but rather are looking for an excuse for pullback than for backing last week rally. According to Baker Hughes, the number of drilling rigs in the US increased last week while production reached a record 9.62M bpd. The most alarming part in fundamental picture of the US output was the pace of recovery after hurricanes blow - producers covered a drawdown of 1M bpd in just two weeks. This points to serious plans of US producers to fight for a share in the foreign market. One of the indicators of the increasing US export may be narrowing spread between Brent and WTI, which may disguise the dynamics of inventories in industrial countries, the main OPEC’s target. OPEC pledges it will continue to fight against the glut, while preserving production caps among cartel members. Secretary General Mohamed Barkindo said at the Abu Dhabi conference that thanks to the economic upturn, hydrocarbon consumption forecasts are likely to change more than once, while the cartel will remain committed to supply reduction policies. Most important update will be probably made at a meeting on November 25 in Vienna. As a factor of uncertainty, this meeting will most likely cause pressure on prices, so the price forecast, based on the available information, remains bearish for this week. The market also probably priced in the information on increasing production of Russian Rosneft, which in the third quarter amounted to 70.5 million tons, up 0.7% compared to the previous quarter. Tax Reform Investors in European markets show defensive behavior, the German DAX and the British FTSE are traded in negative territory. The market extend profit-taking move, since uncertainty before the release of final version of the tax reform makes it difficult to determine the future prospects for global economic growth. The US Senate and the House of Representatives are arguing about the feasibility of repealing the property tax, the main point of the reform at which there are disagreements. Markets closely monitor any news about the negotiation process, which produced a kind of a lull before the storm. Safe heaven assets are slowly creeping up and for gold this week is likely to become very productive. Pound Sterling The sharpest movement in the foreign exchange market among the major currencies occurred on GBPUSD. As expected, the pair rushed to the level of 1.30 on the ordeal of Prime Minister Theresa May to hold power in their hands, while the deadline of Brexit talks are approaching. According to the newspaper Sunday times, more than forty members of parliament spoke in favor of dismissing May from the post of prime minister. Conservatives need to collect eight more votes to start the process of dismissal from the post of party leader and choose a new leader. Arthur Idiatulin
FX:XAUUSDLong
by Tickmill
White House investigation is back to headlinesAsian markets gained on Tuesday dismissing weak factory data in the Chinese economy while the dollar has decided to hold up with growth, as the investigation into Russia’s meddling wth the US presidential election led to former campaign manager Manafort charged with money laundering and tax evasion, promising more intriguing data on possible POTUS collusion with Russians. «Hunt for Russians" has long been a wandering pain for the US currency, eroding its strength time to time. This time investigators reached lobbyist Paul Manafort, former head of Trump's election campaign, charging him with conspiracy, money laundering and tax evasion. The Democrats hope that Manafort and his team members will prove to be a weak link in Moscow's involvement in the presidential election, as the long accusatory list promises many valuable details and possibly cooperation on his part. The Korean KOSPI index rose 1% to a new high after Seoul and Beijing made concessions to each other on the deployment of US air defense in South Korea, which China regarded as a violation of the military balance in the region. Wall Street retreated from the highs of Monday upset that US lawmakers can switch to the path of gradual changes instead of a one-time cut in the tax reform which is currently under discussion. Stock markets met the news swaying at record highs, what led to decrease to a more stable levels. The dollar witnessed some selloff for the second day in a row after the rally rested in a 3-month high at 95.00. Long positions from current levels may be unsafe, since the US currency will probably experience a more serious pullback on the White House investigation before rising again on expectations of reflation. The US currency was also under fire on reports that Trump will opt for Jeremy Powell as next Fed fead, not quite market-friendly candidate, who is regarded the most dovish candidate among all. His most likely competitor to this position is economist John Taylor, known for his Taylor rule in the matter of the pace of money supply expansion in the economy. The Japanese yen slightly reacted to the CB decision to keep QE unchanged, while the inflation forecast for the current fiscal year was reduced, which became a bearish signal for the yen. Markets hoped for QE cues from the board newcomer Gushi Kataoka, who last time took swipes on the absence of changes in bond-buying program. However, he limited himself to the statement that the Bank of Japan should make it clear about its commitment to stimulate economy in order to maintain the yields of debt market at a key level of 0 percent. The Bank of Japan still hopes to achieve a target inflation rate of 2% by 2020. Arthur Idiatulin
Long
by Tickmill
EURUSD: IMF key levelsEURUSD has a weekly uptrend, from a 'Time at Mode' perspective, and the sentiment is considerably negative for it lately, with the French elections starting the first round tomorrow. This weekend, the IMF meeting takes place, and it might be a very significant event for the Euro. This week is packed with data and potential catalysts for all markets, with Mnuchin's speech in less than 2 hours from now, the IMF meetings today and tomorrow, and French elections, things will be interesting at the open. Then during the week, we have Trump's 'tax package' announcement after Wedneday, as well as the freedom caucus potentially approving the revised Obamacare repeal plan. What is certain, is that mainstream media, sentiment, and the regular Joe will get it all wrong, sadly. So, let's try to remain contrarian. Best of luck and have a nice weekend. Ivan Labrie. Ref: www.bloomberg.com www.bloomberg.com "The IMFC statement reiterated pledges from October to “refrain from competitive devaluations” of currencies and to avoid targeting “our exchange rates for competitive purposes.”"
Long
by IvanLabrie