Crazy season in the markets

Ah friends, I hate to be the one to break it to you but silly season is upon us. The end of August with the UK Bank Holiday on Monday 29th and then Labor Day the following Monday in the US sees many traders heading off to the country for a few days R&R. Fewer announcements that affect the markets happen around this time, but with junior left in the driving seat the markets can get a little… cray-cray. crazydancing

But let’s not be glum – after all, one man’s trash is another man’s treasure and this week, let’s treasure hunt. Here’s what you should be watching to get the most of the markets.

USD

Last week the dollar index was up 1% after Yellen’s Friday speech at Jackson Hole hinted at a possible September rate rise. Some pundits think it won’t happen until December so it doesn’t affect November’s presidential election but this week’s Non-Farm Payroll on Friday coupled with Tuesday’s CB Consumer Confidence and a few other US figures due out this week could give the Fed a positive reason to hike rates sooner rather than later. Both key announcements follow two months of higher than predicted figures. If this trend continues this week, the US economy will look stronger to the markets. It’s worth noting that not everyone agrees – one major bank was shorting the dollar two days before Jackson Hole.

Oil

Last week, oil declined around 3% after an initial 9% rise so ended approx 6% up on the previous week. The midweek Crude Oil Inventories figures will stimulate movement but the trick is knowing which way to jump. Last week’s surprise 2.5M increase evened out the previous -2.5M decline so things could go either way on Wednesday 31st.

EUR

When you play EUR FX pairs, you watch the Germans. That could be spotting when the towels go down around the pool, or if Greta and Oskar are spending much in the shops. This week the Germans reveal their monthly Retail Sales figures. If they have been splashing out, then all is well, but if not, the EUR could take a hit. This announcement could be as early as Monday but the date’s not yet fixed so keep an ear out for updates.

GBP

Monday is a Bank Holiday and the country is closed. This is no joke. The country is closed…

empty tube

The City of London is empty

Happily Thursday and Friday give us some GBP action with two key events – Thursday 9.30am sees the Manufacturing PMI figures (after 3 months of positive movement July saw a decline) and Friday 9.30am gives us the Construction PMI (after 3 months of negative numbers July saw an increase). This conflict gives our players lots to work with on the FX GBP pairs.

AUSD

Tuesday 2.30am GMT sees the monthly Building Approvals figures. You know and I know they’ve been shocking with two months of pretty steep decline. The markets will be looking for a turnaround in the numbers or they could lose faith, but there are lots of factors at play for the value of AUD this week. Wednesday 2.00am GMT the Assistant Governor of the RBA speaks in Singapore and may drop hints about future policy. Traders love nothing more than reading too much into the nuances of speeches like this. Then Thursday 2.30am brings Private Capital Expenditure  and Retail Sales monthly figures. Both have declined and the recent apparent strength of AUSD could be about to wobble.

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Whistle while you work…

by Denton Cushing

by Denton Cushing

Not quite how I remember these guys but they had a knack of being cheery about working down a mine. And a good thing too when this week’s big focus is on employment figures.

Tuesday 2.30am GMT

AUD Monetary Policy Meeting Minutes – who gets excited about minutes? Traders do, that’s who. And for good reason, these minutes usually contain trading gold about what influenced the Bank’s most recent decision on interest rates. It’s a good heads up on where the economy is heading next.

Tuesday 9.30am GMT

GBP CPI (consumer price index) – last month bucked the trend as actual figures were 0.1 higher than forecast at 0.5, which we haven’t seen since April. Have average prices risen substantially since this time last year? Not likely so expect another micro change if anything. Forecasts say 0.5. We agree. The GBP RPI (retail price index) data is released at the same time but are slightly more optimistic forecasting a 0.1 rise. Let’s not hold our breath though.

More interestingly, the GBP PPI (producer price index) also at 9.30 GMT forecasts a significant drop from 1.8% to 0.6%. So it will be cheaper to make things in the UK, but what do the Brits even make anyway? Traders will be watching and the GBP could take a hit.

Tuesday 10.00 GMT

The Germans have a big influence over the Euro and the ZEW German economic sentiment statement has been on a wild ride. It’s a 6-month view of the economy from a group of bods seriously in the know. Spiking to 19.2 in June after a predicted 5.1 then plunging to -6.8 in July, there is a lot of speculation about this month’s announcement. These guys are worth listening to but they don’t always get things right.

Now, spot the difference – ZEW economic sentiment statement – took me a while too, the first time. This statement, also at 10am GMT, also by the same bunch of German economists is about the Eurozone rather than just Germany… seems a little greedy to have two announcements but I guess they want to prolong their moment of glory each month. Important, but less so than the German one and less of an impact on the markets.

Tuesday 1.30pm

A working lunch today – so many announcements from the USA that the currency is going to get a little hot under the collar a little as traders take it all in. Here’s what they’ll be reacting to:

  • Building Permits (last few months on track with forecasts)
  • Housing Starts (actual has been slightly higher than forecast in recent months)
  • CPI m/m (forecast is flat, no growth 0.0)
  • Core CPI m/m (excludes food and energy, seen as more reliable; says 0.2)

Wednesday 2.30am GMT

Australia’s going to let slip what people are earning Down Under with the Wage Price Index. It’s been steady as she goes for months at around 0.5% to 0.6% but other figures from Oz have been a little rocky lately – will this be the moment wages start to suffer?

Wednesday 9.30 GMT

whdh.com hire me image DM

The Brits are also talking about their pay packets with three UK announcements at 9.30 GMT

  • GBP Average Earnings Index
  • Claimant Count Change
  • Unemployment Rate

The GBP Average Earnings Index quarterly figures were a little above forecast in May and June but July was spot on. Punters are giving the nod to another rise from 2.3% to 2.5%. Higher business costs aren’t always a good thing, but more money in Henry’s pocket means the high street should benefit. We think the pound will get a little boost if the figure is above forecast.

How many Henrys are claiming benefits? The GBP Jobless Claims total was quite good news last month when figures rose by a minimal amount at 0.4K though forecast at 4.1K. Now they’re saying to expect a 5.2K rise. On past form, they’re off the mark and low unemployment is good for currency.

Talking of which, the Unemployment Rate has been fairly stable at around 5.0%. No surprises expected in today’s announcement. But that’s the thing about surprises – you just never know.

Wednesday 3.30pm GMT

robin-thicke-i-know-you-want-it-blurred-lines

If you’re going to pick any one announcement to trade around today, I’d pick this one. USD is going to react whatever happens. All the news talks about is global overproduction so the markets keep predicting a drop in Crude Oil Inventories to help shore up the price, but the reality is the inventories have grown by around 4 million barrels in the last three weeks alone. This week the prediction is finally skyward by 1.1M and we predict a little dip in the markets to match.

Wednesday 7pm GMT

8 time a year the Federal Open Market Committee  USD FOMC meet at 6pm and the minutes are published at 7pm. This is what the markets are waiting for. It may not be verbatim but there’s enough meat on the bones to give the markets something to chew on.

Thursday 2.30am GMT

Australia puts the spotlight on Employment Change  and their Unemployment Rate this time. With the rate steady at around 5.8% for the last few months, it’s the change that traders will focus on. Increases jumped in April to 26.1K but they’ve been dropping since then. July saw an increase of only 7.9K but the powers that be are positive and see a 10.2K increase coming. If they’re right or if it’s higher the AUD will be on the up.

Thursday 9.30am GMT

Henry and Henrietta have not been to shops shocking markets with a -0.9% drop against the already gloomy -0.4% predicted for the Retail Sales m/m. Retrospectively the 0.9% gain in July looks like a blip. The UKP could be heading into a tailspin if there’s another negative figure and the klaxon sound of a recession is echoing over the hills.

Thursday 1.30pm

Pull up a chair and take a punt on the USD with two big announcements.

  • Philly Fed Manufacturing Index
  • Unemployment Claims

August has seen a jump in newly broke Americans compared to the relatively gainful July before and looks like there’s going to be more. The economy isn’t tanking as such but it’s not a great time to be the last one in the door somewhere.

yummy scrummy

yummy scrummy

Do you like Philly? Lovely stuff. Cool and creamy and great on a bagel. I digress. Philadelphia on the other hand is less tasty but traders love it anyway. Their manufacturers give a good indication of the economy with a little survey. The thing is the forecast and the actual index are often a pole apart. Aside from a great month in March 2016 has been mostly below 0.0 and there’s no reason to suspect otherwise now. Forecasters say a tentative 1.4. We say the traders will be twitchy.

Friday 9.30am GMT

It’s the end of the week, early doors, I hear you say. And you’d be about right. Aside from a little GBP action early on with Public Sector Net Borrowing there’s little to spook traders today.  If you want some serious fun over the weekend, keep your nose to the ground for Bitcoin news and skip over there. Otherwise..

top-10-summer-cats-relaxing-in-deckchairs-L-buipB8

Is Brent Oil in a Bear Market? Not while its above $40.5

Brent Oil at trading level

Hold on to your hat! Oil may be ready to drop

Once again, we seem to be at a key level for Oil. Brent Oil is trading at $42 as we go into the Trade Inventories announcement today (2.30pm GMT). From a years high of $52.86, Brent has dropped over 20% and is now trading just below the 200 day price average (a key indicator used by traders to gauge the sentiment of a market).

If the $42 should break with selling, the next area of interest is $40.50 which is the half way back of this years bullish correction. Below this level, $37.30 may attract buyers with its previous demand and the 61.8 fibonacci nearby.

We are still trading at the $42 level though and with the 200 moving average nearby, the bulls may decide this is not a bad place to build a long position.

some trade levels on brent oil

Where might the buyers be?

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Whatever direction you think the markets are going to go, you can learn to trade at no risk here at SparkProfit. You can even earn weekly cash rewards.

For bigger returns you’ll want TIQL, the New Way To Trade. TIQL was designed to be the world’s safest and simplest trading app – guaranteed, and with the $10 first deposit halved to $5 just for this week there’s no better time to join!

Please note our disclaimer on all of this.

Oil – Some Levels To Trade

Depending on what you read, the fundamentals seem to be bulish and bearish on Oil in equal quantities lately.

Oil prices have dropped over 50% in the last year with retail investors and informed money alike shorting Brent and Crude futures markets this year. Goldman Sachs have gone as far as to predict that Oil prices could remain depressed for the next 15 years due to a global over supply.

However, in early trading this week, Oil prices have risen against a fundamental backdrop of talk about declining stockpiles, the futures contract rollover on September 16th and a large net reduction in long positions by Hedge Funds according to the Commodity Futures Trading Commission.

Its hard to know which way to trade…

What are the charts saying?

Oil trend is down but buyers have come in

The trend is down, but thats not the whole story.

This is a very bearish chart, Brent oil has been dropping over the last year and price has been capped by the trend line in play. What is interesting about this chart is that price broke the yearly lows and plunged to the early $42 before it picked up some buyers and we got some impulsive looking candles bringing price rapidly to $52.

We are now seeing some back and forth corrective price action with price basing off of the $47 level. If we drill down to the 4 hour chart, we can see the corrective price action we have had recently with price firmly capped for now.

Price action is just going sideways

A slow sideways grind

If the $47 level can hold, we may get a slow corrective grind to the $58.50 – $59.50 level before suppply really kicks in again. But before Brent can get to this level, there are a couple of potential sticky supply levels to be aware of.

Some levels to watch on Oil

Some levels to watch on Oil

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Which ever way you think Oil is going to go, you can play it risk free with SparkProfit.

Please note our disclaimer on all of this.

Brent Oil Continues Lower – Shorts Beware $63 Level Though

Brent oil futures are approaching $63 and if this level fails, the next significant demand level is at $59.50

Oil dropping.. for now

Oil dropping.. for now

  • Brent has been making a series of lower lows and lower highs and forming a bearish sentiment channel
  • Two ABCD patters complete into $63 – the larger of the ABCD patterns match previous swings in this market.
  • The larger of the abcd pattern has its 127 extension completing at $63
  • The 161 ABCD pattern completes at $59.50 into previous support and demand candles
  • The same 161 ABCD completes into the same area as the equidistant swing matching the move from mid February to mid March on the chart above

The SparkProfit sentiment indicator which reflects the opinion of the crowd is demonstrating an increasing bullish sentement amounst our players.

Bullish consensus is growing

Bullish consensus is growing

No Risk With SparkProfit

Which ever way you think Oil is going to go, you can play it risk free with SparkProfit.

Please note our disclaimer on all of this.

Some Potential Buy Zones On Brent Oil

We may have an intermediate high in on Brent Oil with an ABCD pattern completing around $69.50. It looks like the bears may have the ball for now. We can see a small channel forming and three lower highs as the bulls failed to take the highs.

That being said, there are a couple of interesting demand levels emerging which may attract some buying.

Demand Zones On Brent Oil

Demand Zones On Brent Oil

  • There is the 100% extension completing into previous highs from mid February at $63. Nearby, the price action indicate that we have had  demand at this level. This price will likely provide some support and buying interest
  • The 161% extension completes at $59.50. The equidistant swing matching the move from the highs of mid February to the lows at the mid of March also complete at this point.

In SparkProfit, the sentiment as measured by the consensus of the crowd, is bullish on Oil presently.

The Crowd Are Bullish On Oil

The Crowd Are Bullish On Oil

No Risk With SparkProfit

Which ever way you think Oil is going to go, you can play it risk free with SparkProfit.

Please note our disclaimer on all of this.

The Crowd Love Oil… For Now..

more_downside_oil

Oil has been one of the more traded markets this last couple of months giving a white knuckle ride as the price of oil fell about 60% before finding some demand at around $46 (in Brent) in January. Since then, oil has risen to $69 giving the bears a run for their money.

OPEC are said to be predicting that Oil will remain below $100 until 2025 according to a draft report seen by The Wall Street Journal. In another scenario, the report warned that crude oil could be as low as $40 a barrel in 2025. Its great to see that the experts can agree a forecast for oil!

Well, while the experts hedge their bets, our players are forecasting more upside for oil, at least in the short term. The chart below shows the global sentiment of our players on this market. We’ve started the week with a net bullish bias on this market but it’s early in the week yet so things could change

sparkprofit players buy oil

SparkProfit players have started the week buying oil

The Longer Term View

The longer term chart below shows some interesting levels on Brent. Sellers have already come in at around the 69 level where the ABCD pattern completes. If price can break the recent highs, the next level of interest for the shorts may be the half way back of the bearish move down at $80

Short levels on Brent

Short levels on Brent

Could oil reach $80 soon? Sure, if we get the same sort of price move that we did off of the lows in January.

oil_to_80

Can Oil Reach $80 soon?

If we drill down into a shorter term chart, we can see that price is testing the bottom of a sentiment channel and near term support at $64. If price can break and hold below the stronger support at $63, we may see some committed selling on Brent.

$63 the level to watch

$63 the level to watch

No Risk With SparkProfit

Which ever way you think Oil is going to go, you can play it risk free with SparkProfit.

Please note our disclaimer on all of this.