Archives of “July 15, 2019” day

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China reiterates that it will sanction US firms involved in Taiwan arms sales

  
  Analysis

Comments by China’s foreign ministry

There are only a handful of firms believed to be involved in this matter as pointed out here, but even so their relation to other Chinese firms are a bit of a mystery – though I reckon China themselves should have their own defense contractors so yeah.

But the gesture here is more of a symbolic one rather than one of magnitude as it comes amid the backdrop of trade talks between both countries sitting in limbo.

ICYMI – Trump takes yet another dig at the Fed

  
  Analysis
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Trump doesn’t appear to be relenting his stance ahead of the FOMC meeting

The tweet read:

“We are doing great Economically as a Country, Number One, despite the Fed’s antiquated policy on rates and tightening. Much room to grow!”

With markets already all but certain about a 25 bps rate cut at the end of this month and Powell reaffirming those expectations, it sure sounds like he wants more rate cuts to follow later in the year despite claims of the economy doing “great”.
The issue here is that Trump wants to pursue a currency war now and that is not what the Fed is looking to do. If the Fed is just throwing around rate cuts on the back of some slight worries in the economic data, they won’t have very much ammunition left to deal with a proper economic downturn when the time does come.

Why Technical Analysis Works

  
Analysis, Education
  • All through time, people have basically acted and re-acted the same way in the market as a result of: greed, fear, ignorance, and hope – that is why the numerical formations and patterns recur on a constant basis.
  • There is nothing new on Wall Street or in stock speculation. What has happened in the past will happen again, and again, and again. This is because human nature does not change, and it is human emotion, solidly built into human nature, that always gets in the way of human intelligence.

Elements of a Plan

  
Analysis, Education
  • Decide what type of participant you’re going to be
    • Investor or speculator?
    • What markets to participate in? Needs to be consistent with the characteristics and time horizon of the type of participant you choose to be.
  • Select a method of analysis
    • Don’t jump back and forth among several methods in search of supporting evidence to justify holding onto a market position.
  • Develop rules
    • Define hard-and-fast rules on what constitutes an opportunity for you, what are the entry and exit points.
  • Establish controls
    • Define the exit criteria that will take you out of the market either at a profit or loss, e.g. price order, time stop, condition stop.
    • Before you get into the market, you have to decide where (price) or when (time) or why (new information) you will no longer want the position.
    • Your exit criteria creates a discrete event, ending the position and preventing the continuous process from going on and on.

Bitcoin weekend update – lower

  
Analysis, BITCOIN
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The rot for crypto began on Friday and continued over the weekend.

On approach back towards $10,000
Not helping matters were weekend reports on US government proposals to prevent big technology companies from functioning as financial institutions or issuing digital currencies
  • will be discussed by Congress’ House Financial Services Committee
  • draft legislation “Keep Big Tech Out Of Finance Act”

The rot for crypto began on Friday and continued over the weekend.

Barclays on the FOMC – 25bp cut in July, more to come by end of 2019

  
  Analysis
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Scanning through some of the late week info from via banks, this via Barclays, in brief:

  • Powell’s testimony was dovish, surprisingly so
  • Increases confidence on 25 bp cut to come this month
  • two more 25bp cuts to come by the end of the year
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No surprise from Barclays on the July forecast, this is consensus. A further 50bps to come by year end is a bit of an eyebrow raiser though.

Citi on the FOMC, 25 bp cut this month and another by year end

Citi see an increased downside risk for the US economy …. but acknowledge:
  • that view is clearly not shared by Chair Powell
  • July … a 25 basis point cut is likely to provoke two or more dissents, 25 basis points may be the compromise policy outcome
  • Following … one additional 25 basis point cut, most likely in September
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