Jump to content



Photo

Shutdown &Trade war trump Ultra Dovish FED


  • Please log in to reply
12 replies to this topic

#1 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 3,159 posts

Posted 09 January 2019 - 08:46 PM

Market momentum stalled even as an ultra dovish FED tried to comfort worried bulls. 

 

BUT it was the acrimonious outcome of the Shutdown meeting that scared the market and the rather tepid release from China on the Trade War talks disappointed many who bought the favorable report from the US participants. Markets were reacting to this news quite actively so I decided to trade NQ in the night session. 

 

Still, this pullback may be just a minor retracement to SPX 2520/25 zone unless there is more bad news during the next two days.

 

Most likely, the Shutdown issue will be resolved with a face-saving deal from both sides and the Trade war talks will continue soon but the really difficult issue for the bulls will be the Q4 earnings report PLUS revisions, warnings etc during the next few weeks. 

 

From GMM:

 

unnamed-9.png
  • The S&P continues to march toward, what we believe, is the next major area of resistance at 2640ish, which is the zip code where the 50-day and next key Fibo live
  • The market will soon be tested with the Q4 earnings reports, which will be interesting, to say the least, with all the foreign exposure in S&P500 earnings
  • Doji candlesticks have signaled coming downdrafts since the October top, the closest signal we have found to ringing a bell at the top
  • We are becoming a bit more cautious as the daily candlesticks over the past few days are beginning to resemble Dojis.  Watch this space. 
  • If the S&P generates a nice formed daily Doji, we will get shorty for a trade
  • The S&P needs to hold 2573.61, the key Fibo level du

 



#2 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 3,159 posts

Posted 09 January 2019 - 08:48 PM

unnamed11.png

 

 

https://macromon.wor...0-key-levels-7/



#3 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 3,159 posts

Posted 09 January 2019 - 08:50 PM

BLACKROCK: Powell’s pivot “ultimately is likely to be insufficient to calm markets, as it lacks a clear commitment to a sustained pause ... or in balance sheet unwinding, and the latter factor is still contributing to the decline in global liquidity, in our view”

 

Dwf6jwFX0AQ0F24.jpg
1:14 PM - 9 Jan 2019


#4 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 3,159 posts

Posted 09 January 2019 - 08:51 PM

Douglas Kass Retweeted

Biggest drop in China YoY PPI in 7 years.

Dwg17wNWsAA1duV.jpg
3 replies42 retweets54 likes
Reply
 3
 
Retweet
 42
 
 
Like
 54


#5 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 3,159 posts

Posted 09 January 2019 - 09:00 PM

Tim Ord Bullish

 

 

1547053925362802493792.gif

The bottom window is the five day average of the TRIN. Short-term highs have been found when the 5-Day TRIN reaches .80 or lower (identified with red vertical lines). The current reading is 1.09 and in neutral territory. The top window is the NYSE McClellan Oscillator. According to the McClellan rules when the McClellan Oscillator travels from -300 to +200 within two weeks (current setup was -319 to +287 and still rising), this suggests an initiation of an up-move. There can be pullbacks when these readings are met, but this suggests an uptrend is starting. What is interesting here is that the Advance/Decline was over 3/1 to the upside, which in turn will push the McClellan Oscillator even higher today. The market could move higher in the short term.

https://stockcharts....ary-8-2019.html



#6 redfoliage2

redfoliage2

    Member

  • Traders-Talk User
  • 12,461 posts

Posted 09 January 2019 - 09:45 PM

The problem is that traders have had high hopes on the trade talk and it just turned out that the two sides still far apart on key issues such as structure changes and government subsidies on high tech industries ...........


Edited by redfoliage2, 09 January 2019 - 09:47 PM.


#7 misiu_byk

misiu_byk

    Member

  • Traders-Talk User
  • 91 posts

Posted 09 January 2019 - 10:36 PM

 

BLACKROCK: Powell’s pivot “ultimately is likely to be insufficient to calm markets, as it lacks a clear commitment to a sustained pause ... or in balance sheet unwinding, and the latter factor is still contributing to the decline in global liquidity, in our view”

 

 

The dovish fed comments almost remind me of opec --> when prices start to fall they first see what kind of reaction they can get from pure lip service.  If that doesn't work, they will actually cut production at a subsequent meeting.  Also, for Powell I bet he really wants to reduce that balance sheet as much as possible with as little damage to the broad market - so they can re-inflate when the time comes.  If he manages to pull it off, that would be quite amazing.

 

*again - always look forward to reading your threads dTraderB! thanks for sharing all the balanced articles


Edited by misiu_byk, 09 January 2019 - 10:39 PM.


#8 dTraderB

dTraderB

    Member

  • Traders-Talk User
  • 3,159 posts

Posted 10 January 2019 - 06:22 AM

 

 

BLACKROCK: Powell’s pivot “ultimately is likely to be insufficient to calm markets, as it lacks a clear commitment to a sustained pause ... or in balance sheet unwinding, and the latter factor is still contributing to the decline in global liquidity, in our view”

 

 

The dovish fed comments almost remind me of opec --> when prices start to fall they first see what kind of reaction they can get from pure lip service.  If that doesn't work, they will actually cut production at a subsequent meeting.  Also, for Powell I bet he really wants to reduce that balance sheet as much as possible with as little damage to the broad market - so they can re-inflate when the time comes.  If he manages to pull it off, that would be quite amazing.

 

*again - always look forward to reading your threads dTraderB! thanks for sharing all the balanced articles

 

 

 

The FED can reduce the balance sheet in a stealthy way, not saying that it will be done in AUTO mode, but just doing it first and then informing the market. 

BUT THEY HAVE TO DO IT in 2019 or else when? Not when the economy slows and possibly enters a recession! 

 

The best thing for the economy during the first half of 2019 is SPX rally to at least 2800 and allow the FED to quietly reduce that balance sheet during this time.

 

It appears as if SPX will test 2350 first before rallying to 2700 and higher



#9 LMF

LMF

    Member

  • Traders-Talk User
  • 146 posts

Posted 10 January 2019 - 09:18 AM

The Fed rate hike in December was arguably one of the biggest screw ups in their history.  Just because they had no guts to do the work with rate hikes and the balance sheet years ago, doesn't support doing it all now when the economy is much less able to handle it than it was then.  If the Fed had any brain cells they should have been able to see it by December when you spend perhaps 5 minutes looking at the RUT chart.  It's really not much more complicated than that.  If you can't do that and get the right answer, there is no hope for them.  None zero zip....nada.  They honestly need to be put out of business.....


Edited by LMF, 10 January 2019 - 09:19 AM.


#10 tradesurfer

tradesurfer

    Member

  • Traders-Talk User
  • 2,130 posts

Posted 10 January 2019 - 01:42 PM

any chance the govt shut down leads to credit rating downgrade again ?