International markets traders banter

[skc]

US dollar, US credit, US stocks just spent the last 6-9 months "pricing in"/anticipating a rate hike!

I think there would need to be a surprise decision to move the markets significantly, either a hike or a cut ...25bps either way ain't gonna move much at this point.

I also assume the market will probably punish any perceived inaction, so a "no hike" move will not be good for sentiment. Better to do anything than nothing, I am sure the market will be thinking.

It's a tough one. In traditional market theory... it's priced in. But the market action in the last 3 weeks tell a different tale.

It feels to me that the market overall is getting dumber in the sense that it really is very short term focused. Institutions are buying and selling to maximise return for the next month, based on history of the last 12 months and forecast/extrapolation for the next 4 weeks (all numbers simplified, but that's the gist of it).

So everyone is looking at what the other person is doing and thinking that the other person has it all priced in... and it turns out nobody has it priced in.

So I am keeping my eyes wide open on this one.

 

[shouldaindex]

10 of last 12 initial Fed hikes have had negative returns in the following 3 months (mostly single digits).

 

[sinner]

10 of last 12 initial Fed hikes have had negative returns in the following 3 months (mostly single digits).

Be careful which conclusions you draw from that though. What are the returns following Fed cuts? I remember they cut non stop during 2008 and the market followed the cuts down every step of the way.

The short term relationship between interest rates and stocks is not as strong as most people think.

It is just me or is the intraday Dow futures chart looking pretty bullish?


Further buying above ~16200 would be supportive.

 

[shouldaindex]

FTSE -2%
Dow -1%

XJO Futures only down 15 points.

Data from U.S just out. I think the market wants it's 20% decline done and will use NFP and Fed to accomplish it, regardless of the actual information, hence a possible win-win or lose-lose no matter what they decide.

 

[kid hustlr]

SPi Futures.

Interesting they didn't try to jam it through the support over Payrolls - Wonder if this is just a Friday night hangover after a long week or perhaps there's a hint of bullishness in that?

Regardless Monday will prove interesting given the levels. We could get the old gap open lower and go again here given the 'thin air' below. Alternatively if there's bullishness a foot it wouldn't surprise me if 5300 was re-visited quite quickly.

For me personally, looking at the charts I don't think the banks have bottomed and the immediate risk still appears to be the downside.



EDIT:

AUD hammered overnight, overseas fundies hit the sell button monday morning?

 

[kid hustlr]

It really is shaping up to be an interesting week.

 

[qldfrog]

unless mistaken, I believe there is a public holiday in the US on monday? and China will reopen next week too which may influence the US too
so the effect on the local ASX may not be nice to see on Monday at least .
I expect solid hammering for our local market

 

[kid hustlr]

unless mistaken, I believe there is a public holiday in the US on monday? and China will reopen next week too which may influence the US too
so the effect on the local ASX may not be nice to see on Monday at least .
I expect solid hammering for our local market

I keep making cases to be bearish which makes me think I should be leaning the other way. Trading plan: If we gap lower Monday morning look for more carnage if not stand aside.

 

[CanOz]

Chinese regulators have raised the margin requirements for shanghai futures to a level beyond that of the private trader. My good friend and exceptionally talented outright directional futures trader Xiao Jun is out of work. Sidelined by ridiculous margin levels.....

There goes the liquidity way to go knuckleheads!

CanOz

 

[gartley]

SPi Futures.

Interesting they didn't try to jam it through the support over Payrolls - Wonder if this is just a Friday night hangover after a long week or perhaps there's a hint of bullishness in that?

Regardless Monday will prove interesting given the levels. We could get the old gap open lower and go again here given the 'thin air' below. Alternatively if there's bullishness a foot it wouldn't surprise me if 5300 was re-visited quite quickly.

For me personally, looking at the charts I don't think the banks have bottomed and the immediate risk still appears to be the downside.

View attachment 64185

EDIT:

AUD hammered overnight, overseas fundies hit the sell button monday morning?

I reckon so, probably a re test of lows and then rally back up into the range.

 

[shouldaindex]

2011 XAO



Wonder what will be similar / different from the August low this time.

 

[CanOz]

Well done Kinetick for having continuous Xina50 contract data! I'm thinking we might test 9800 or maybe even 10000 again!

 

[Logique]

Just tooling around with the long term US S&P500 (SPX). I was struck by the tech similarities to two previous corrections. Not much joy in this for the Bulls I'm afraid.

If it continues down - support at ~1800 and below this ~1550, look to be the areas to watch.

 

[kid hustlr]

What a difference a day makes

 

[sinner]

What a difference a day makes

One saying that I remember from 2008 is that on the way down, the market trades heavily on technical levels.

Presenting, the 24h Dow cash and its 400 point drop perfectly off the 10 day highest close. Just a pretty chart, no opinion here.



I never used to pay much attention to the Dow, being partial to the SPY ETF. However recently I've grown affinity for it, being a very old and simply constructed index of 30 very large multinationals. Good example that you don't need to hold 500 stocks for diversification!

 

[Modest]

What just happened to all the liquidity on the ES

 

[PinguPingu]

As our good friend would say:

https://www.youtube.com/watch?v=m_djk1RQ2Ew

 

[sinner]

This flow chart from Eric Hussander @ NANEX provides a useful guide for retail traders outside the US who aspire to succeed:


https://twitter.com/nanexllc/status/642065792029343750/photo/1

 

[CanOz]

I guess the HFT dudes have bigger pockets with which to lobby...money talks

 

[shouldaindex]

One possibility I'm thinking about is a final surge up (About 6-10%) for the U.S Market on the back of a favourable Fed decision, before commencing the major leg of a bear.

Comparison is from the ASX in February upon the RBA's last favourable decision.