The Dow Positioning Itself to Breakout in 2016?
The Dow has been electing Daily Bullish Reversals since the start of October. Given the fact that the DAX did break last year’s low on the ECM target and turned up, we may be looking at the breakout to the upside next year for the phase transition.
Our original forecast for the peak in share buy-backs was due now. This trend should start to now ease back, but central banks will continue to buy shares as diversification is desperately needed.
The Dow will remain in a bullish posture closing 2015 above 15340, which was last year’s low. Only a closing beneath this level would be technically very bearish and warn of a Sling-Shot type move ahead. Otherwise, the timing potentials for a high remain 2016, 2020, and 2022-2024. A low on any target would imply the next would be a high and vice versa.
30th Anniversary of the World Economic Conference Begins Today
Welcome to this year’s World Economic Conference
which is our 30th Anniversary since the first in 1985. Ironically, it
is being held across the street from where our first conference was
held.This year will be special for over 600 people are attending this Conference in the USA and a similar number will be joining in Berlin. This will be a fantastic networking gathering and many people who even attended the 1985 conference have flown in for this one.
Merkel May be Forced from Office Over Refugees
Merkel’s refugee policy has really divided
Europe no less her own country. This issue appears to be stages to bring
about her downfall. It was 17 days ahead of the ECM turning point on
September 13th (2 x 8.6) when Merkel reimposed border controls, the
cornerstone of Europe was to be the freedom of movement. She has
certainly divided Europe. It is starting to appear that her days are numbered.
Schengen Agreement Suspended
Last February, we warned that the Schengen Agreement, which allows the freedom of movement within Europe, would come to an end. This crazy idea of allowing millions of refugees from a completely different culture to enter Europe will be its undoing. The suspension of Schengen by Germany is the beginning of the end.
Market Talk – Nov. 6th, 2015
Asian equity markets were strong ahead of
the US data with the Nikkei closing a promising week up 150pts (+0.8%)
and Shanghai up 66pts (+1.9%). Worth noting this evening is that the
Nikkei futures have built upon today’s cash gains and are currently up
an additional 190pts at 19,480 (+1%). Europe failed to
participate following the Asian momentum, that is – until the US Jobs
numbers were released and that was the start of all the big moves.
Non-Farms expectations were for around the +180k so a +271k print really
did set the cat amongst the pigeons! Initially, stocks rallied then
turned negative only to spend the rest of the day deciding which way to
trade.
That was certainly not the case for the US Bond Market which knew
exactly what should be done! Immediately upon the release the front-end
was hit with 2’s up more than 7bp. After a while trade settled down and
we saw the belly (5yr notes) take the weight, with 2/5’s steepening
around 4bp (last seen at +84bp). Actually, the long end held up
reasonably well resulting in the 5/10 and 10/30’s flattening. 10’s
eventually closed the day around 2.32% and 30’s (over the 3% market) at
3.08%.The FX market saw the majority of the largest movers with core markets losing almost as much as the emerging market currencies. Even ahead of the release GBP had fallen just as much as Thursday trading and by the close of day had lost around 1.2%. The same was so for the Euro and the JPY. Obviously, it was another good day for the DXY closing at 99.28 (+1.25%). There was large scale 2% losses for the Russian Rouble, Turkish Lira and PLZ. It is worth noting some of the minor cores also had rough days with the A$, CAD and SGD all there or around 1% declines.
A print like this sends a clear green light to the Federal Reserve and the whole market knows what to expect come December. We have stated often, the amount of US debt issued by emerging market countries will become a huge problem as the USD strength continues. If the core also joins this trend the repercussions in the swaps market will almost be unprecedented.
Despite those who keep waiting for the dollar to crash and hyperinflation to emerge, they remain ignorant of the global trend and the crisis brewing outside the USA.
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