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Trading the Trend
- Thread starter ducati916
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There was a question yesterday; why is Dr Copper important?
Last month, ISM's headline manufacturing number saw a slight rebound rising from the April low of 41.5 to 43.1. That indicated that activity was still worsening in May albeit at a slower pace than April. Fast forward to June's reading released this morning and ISM's manufacturing report showed a huge rebound in activity with the headline index rising 9.5 percentage points to 52.6. That is the headline index's highest reading since March of last year and was also the first back to back increases since June 2018. A reading above 50 also indicates the first expansionary reading in the manufacturing sector since February. Lastly, perhaps most notable about today's report was that the 9.5 point m/m increase was also the third-largest on record behind a 10.5 point increase in August of 1980 and a 12.1 point jump all the way back in August of 1952.
Respondent commentary reinforced the rebound with most making some mention of demand or production improving in June. Important to note, while they point to improved conditions from the past few months, that is not to say activity has necessarily returned to pre-COVID levels. In fact, one comment out of the Chemical Products industry reported that it ha been a "slow recovery" and the Petroleum & Coal Products industry mentioned that things are still "below normal volumes". Regardless, as the commentary from a Plastics & Rubber Products respondent put it, things are still "trending toward normal". In other words, things are back on the right track, but activity has not fully recovered.
Taking a look across the various sub-indices of the report, the headline number was not alone in terms of historic monthly rebounds. Outside of the inventories index, every indices' MoM rise was in the upper 90th percentiles of all readings. Now 6 of the 11 indices are showing expansionary readings compared to just two last month.
Production has been ramping back up with the index rising to 57.3, its highest level since November of 2018. The only larger one month jump in production was in August of 1952 when the index rose 46.8 percentage points. Meanwhile, New Orders saw its largest one month increase on record. Granted that only leaves it in the dead middle of its historic range while backlog of orders are still in contraction for a fourth consecutive month. One interesting point of the data recently has been the index for Supplier Deliveries. Recent months have seen very elevated readings indicating longer delivery times meaning supply chains have appeared to have been disrupted. While this month's reading of 56.9 still indicates longer delivery times, it is a much healthier reading pointing to at least some stabilization. The MoM decline of 11.1 percentage points was also the largest decline since May of 1979.
Commodities in short supply:
That is why you should watch Dr. Copper.
jog on
duc
Last month, ISM's headline manufacturing number saw a slight rebound rising from the April low of 41.5 to 43.1. That indicated that activity was still worsening in May albeit at a slower pace than April. Fast forward to June's reading released this morning and ISM's manufacturing report showed a huge rebound in activity with the headline index rising 9.5 percentage points to 52.6. That is the headline index's highest reading since March of last year and was also the first back to back increases since June 2018. A reading above 50 also indicates the first expansionary reading in the manufacturing sector since February. Lastly, perhaps most notable about today's report was that the 9.5 point m/m increase was also the third-largest on record behind a 10.5 point increase in August of 1980 and a 12.1 point jump all the way back in August of 1952.
Respondent commentary reinforced the rebound with most making some mention of demand or production improving in June. Important to note, while they point to improved conditions from the past few months, that is not to say activity has necessarily returned to pre-COVID levels. In fact, one comment out of the Chemical Products industry reported that it ha been a "slow recovery" and the Petroleum & Coal Products industry mentioned that things are still "below normal volumes". Regardless, as the commentary from a Plastics & Rubber Products respondent put it, things are still "trending toward normal". In other words, things are back on the right track, but activity has not fully recovered.
Taking a look across the various sub-indices of the report, the headline number was not alone in terms of historic monthly rebounds. Outside of the inventories index, every indices' MoM rise was in the upper 90th percentiles of all readings. Now 6 of the 11 indices are showing expansionary readings compared to just two last month.
Production has been ramping back up with the index rising to 57.3, its highest level since November of 2018. The only larger one month jump in production was in August of 1952 when the index rose 46.8 percentage points. Meanwhile, New Orders saw its largest one month increase on record. Granted that only leaves it in the dead middle of its historic range while backlog of orders are still in contraction for a fourth consecutive month. One interesting point of the data recently has been the index for Supplier Deliveries. Recent months have seen very elevated readings indicating longer delivery times meaning supply chains have appeared to have been disrupted. While this month's reading of 56.9 still indicates longer delivery times, it is a much healthier reading pointing to at least some stabilization. The MoM decline of 11.1 percentage points was also the largest decline since May of 1979.
Commodities in short supply:
That is why you should watch Dr. Copper.
jog on
duc
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Seasonality:
jog on
duc
jog on
duc
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Just the way it is.
jog on
duc
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And for a bullish local view, if you go to Kmart, customers are here but shelves are empty, a clear sign IMHO.
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At this stage it is Biden who has more states locked in; and Trump has heaps of work to do in claiming the other states. I will post the electoral map with some brief thoughts tonight.
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This is where I am at:
I got Biden holding 232 and Trump trailing with 199; with 107 unconfirmed. Trump will need to campaign hard to hold onto the unconfirmed states, with a particular focus on the Rust Belt and East Coast states from now and until the election.
2 weeks before the election; I will allocate each state to either Trump or Biden, no states will be unconfirmed.
I got Biden holding 232 and Trump trailing with 199; with 107 unconfirmed. Trump will need to campaign hard to hold onto the unconfirmed states, with a particular focus on the Rust Belt and East Coast states from now and until the election.
2 weeks before the election; I will allocate each state to either Trump or Biden, no states will be unconfirmed.
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So late finish at work tonight, no energy to update.
Therefore I'll leave Mr 9K to call tomorrow in the US. His rather cryptic post on pg13 suggested down, but that may have changed.
jog on
duc
Therefore I'll leave Mr 9K to call tomorrow in the US. His rather cryptic post on pg13 suggested down, but that may have changed.
jog on
duc
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TremblingHand?
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Corn Futures exploded higher:
"Corn futures climb to highest levels since March after USDA forecast on planted acres" (https://www.marketwatch.com/story/c...ted-acres-2020-06-30?link=MW_home_latest_news)
"USDA Crop Report Shocker Sends Corn Futures Surging"
(https://www.zerohedge.com/markets/usda-crop-report-shocker-sends-corn-futures-surging)
I knew I should have taken those long positions last week
"Corn futures climb to highest levels since March after USDA forecast on planted acres" (https://www.marketwatch.com/story/c...ted-acres-2020-06-30?link=MW_home_latest_news)
"USDA Crop Report Shocker Sends Corn Futures Surging"
(https://www.zerohedge.com/markets/usda-crop-report-shocker-sends-corn-futures-surging)
I knew I should have taken those long positions last week
Last edited:
Garpal Gumnut
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Never underestimate a psychopath such as Trump if it doesn't bother him whether he wins or loses.
If he decides he does want to win he is cactus.
gg
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Well; if he wins or loses, the civil unrest aspect will be quite concerning.
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my view is that in term of civil unrest, Trump is a sign, not a cause:
when for now some generations and since the GFC at least, in the west, here and there, you give without return be it companies or people, this leads to entitlement, so if I do not have that pair of shoes, I just break the windows and get it.
"Why can I not afford it?, this is not fair, my right as purple green or blue, loving sex with fairies , etc"
the shop owners knows pretty well, this will not be punished and policing [when police is not dissolved] will not happen, if moreover owner is is white male and above 30, he is the bad guy whatever the circumstances, even being black and defending property is "BAD" and worse a death sentence it seems based on recent news during BLM racist riots
so he takes his gun and shoots.
Roughly 50% of population who has worked hard to get their goods be it houses and cars will fight the 50% who do not have it yet and want it now... just because they are;
A destruction of values which when you think about it is just the culmination of an ideology and a normal consequence
So Trump or Biden, not sure it will change anything, just light a fuse whatever the winner...
Is there any scenario for stability but maybe for an illness killing either of the 2 candidates before election day?I will be cash and conservative before the election month, gold probably
This is where I see the bounce/trend end/stop! so November 2020..we have 3 months
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Yeah I tend to agree; I am trying to stay out of the political discussions. I only made a prediction for the election because it will certainly impact markets.
The last US election, I went to an event a Sydney University that was hosted by the US Studies Centre. They had an expert panel to discuss the Trump-Clinton election, and every expert said that Trump will not win, basically he had no chance. I remember after the event, thinking to myself, on the way home; that surely Trump has at least some chance. So I did my own research and I ended up picking Trump's path to the White House with the exception of a couple of states. Maybe it was a fluke, we will see how I go this time.
over9k
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Cross-post:
So the jobs report was good! Futures way up, expecting a huge bounce on open. Virus data not changing though, so next buy will be next virus-data-driven carryon. That could be monday, could be later than it.
Next stimulus was apparently due later this month, trump is due to talk about it this morning coincidentally (or not) at market open in 20ish minutes time, will update with info then.
So the jobs report was good! Futures way up, expecting a huge bounce on open. Virus data not changing though, so next buy will be next virus-data-driven carryon. That could be monday, could be later than it.
Next stimulus was apparently due later this month, trump is due to talk about it this morning coincidentally (or not) at market open in 20ish minutes time, will update with info then.
over9k
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Lol. Virus data was released like 30 mins after market open. Things were up over 1% on open and all the stuff like industrials that really bounced has just nosedived since, meanwhile stay-at-home tech has continued to rise.
Will be interesting to see what close is. I feel like today's just going to be the whole market/weeks/months in microcosm: Bounce on economic news and then crash on virus news.
Will be interesting to see what close is. I feel like today's just going to be the whole market/weeks/months in microcosm: Bounce on economic news and then crash on virus news.
Last edited:
over9k
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Republican senator grassley (finance committee chairman) on bloomberg now saying that the politicians are targeting 1st of august for the next stimulus package. At the moment they're basically just bickering about what will be in it. Good to know now, should give us a baseline to work from while we try & get some more concrete info/date certainty.
4th of july weekend coming tomorrow so we can expect a ton of virus spread from it in 2-3 weeks time now too. Might be a good target to try & buy at.
4th of july weekend coming tomorrow so we can expect a ton of virus spread from it in 2-3 weeks time now too. Might be a good target to try & buy at.
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So this is how the markets are sitting as I turn my attention to them:
We had Employment news and we had Virus news.
So did the through the night updates, watching the Futures/News help?
I saved yesterday's chart, which could have saved a lot of sleep and avoided watching the news etc through the night.
The little downturn was on a pretty strong day in the market. This is a divergence. Second, we are only at mid-point in our channel between support & resistance.
(a) Divergence: this is the tricky one. Let me leave that for the moment.
(b) Mid-point: this suggests higher tomorrow (which is now today). That is a tick.
So back to (a). We need further context:
Now you'll need to squint a little here: I have horizontal resistance, which it hit and also a trendline, which it didn't hit, but came pretty close. And:
The $VIX (which updates live). The VIX indicated all clear yesterday and confirms that today. But if we had looked at it yesterday, how would we have interpreted it?
Well with $TRIN (which also updates live).
The 'outliers' are buy/sell signals when you get them. However, day-to-day, markets tend to stay in range. So we can see it would/could be pretty random: we could open high, sell-off (as we have) or open low and move higher. Either way we are in that range.
Which means that we can interpret the other two charts as pretty safe, nothing major going on: hold positions.
The key factor however that allows us to say that is: no change in the macro-picture. The news is irrelevant, jobs/virus/Trump/Election, whatever, nothing new here move on. It is noise. Zero signal.
When there is a signal, everything jumps pretty quick. You would be hard pressed to miss it if you are looking.
* You figure out what is noise or signal
jog on
duc
We had Employment news and we had Virus news.
So did the through the night updates, watching the Futures/News help?
I saved yesterday's chart, which could have saved a lot of sleep and avoided watching the news etc through the night.
The little downturn was on a pretty strong day in the market. This is a divergence. Second, we are only at mid-point in our channel between support & resistance.
(a) Divergence: this is the tricky one. Let me leave that for the moment.
(b) Mid-point: this suggests higher tomorrow (which is now today). That is a tick.
So back to (a). We need further context:
Now you'll need to squint a little here: I have horizontal resistance, which it hit and also a trendline, which it didn't hit, but came pretty close. And:
The $VIX (which updates live). The VIX indicated all clear yesterday and confirms that today. But if we had looked at it yesterday, how would we have interpreted it?
Well with $TRIN (which also updates live).
The 'outliers' are buy/sell signals when you get them. However, day-to-day, markets tend to stay in range. So we can see it would/could be pretty random: we could open high, sell-off (as we have) or open low and move higher. Either way we are in that range.
Which means that we can interpret the other two charts as pretty safe, nothing major going on: hold positions.
The key factor however that allows us to say that is: no change in the macro-picture. The news is irrelevant, jobs/virus/Trump/Election, whatever, nothing new here move on. It is noise. Zero signal.
When there is a signal, everything jumps pretty quick. You would be hard pressed to miss it if you are looking.
* You figure out what is noise or signal
jog on
duc
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Nice broad base to the market heading into long w/e. Essentially this is what you want to see. Tech. has been to date very strong. We will want to see all sectors improving and adding weight to the trend. The (below) daily change doesn't really tell you overmuch, I'll update the sectors that I'm involved with later today or over the w/e.
jog on
duc
jog on
duc
over9k
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Yeah but we didn't know if the jobs data was going to be good or not - if it was bad and that was combined with virus data, it would have been a bloodbath.
I don't know what you're holding but there's a killing to be made off the volatility at the moment. I've been having a pretty similar chat in skate's "dump it here" thread.
Here's how I look compared to the 1% an index investment would have made today:
I'm going to be opening up more positions over the next couple of weeks. Still kicking myself I didn't buy some tesla when I was thinking about it last week. I'm kind of amazed at its run tbh.
Stay-at-home tech is still where it's at though.
I don't know what you're holding but there's a killing to be made off the volatility at the moment. I've been having a pretty similar chat in skate's "dump it here" thread.
Here's how I look compared to the 1% an index investment would have made today:
I'm going to be opening up more positions over the next couple of weeks. Still kicking myself I didn't buy some tesla when I was thinking about it last week. I'm kind of amazed at its run tbh.
Stay-at-home tech is still where it's at though.
