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The "What Ian Can See" WICS trading information newsletter - past edition.

Ian's weekly look at the world economic situation. Members get access to the current edition, archives, chart analysis and one-to-one mentoring on your trading.

November 4th 2018

Well, that's Grandson Number One's first unaccompanied visit over and done with, and highly successful it was too! Nine days, and not once did he express any interest in using an electronic device. "Outdoors" was the theme throughout and it has to be said he was extremely helpful, clearing masses of apples from under the trees, collecting elderberries that are now (hopefully) fermenting very happily in demijohns at the back of a dark cupboard, stacking firewood, and various other useful tasks. One of the things he was keen to do, was help me tidy my office, but I put him straight about that idea by informing him that a tidy office is a sign of a sick mind.

He read a couple of books (yes, real books made from paper!) in the evenings and protested not a jot when Mme W. sorted out a hot chocolate drink for him just before ensuring he brushed his teeth before falling exhausted into bed at nine o'clock. All rather a change from his otherwise city existence, and he loved it!

Mind you, the process left me pretty tired too, but hey ho - 'twas fun overall.

It's much less tiring sitting here at my newly renovated laptop (it's amazingly fast again now that it has been all cleaned up) and searching the world for potential trading opportunities, not to mention checking out all the stuff that gives me cause to go just the merest tad into rant mode.

On that note then, onward into the world of high finance, and isn't it uplifting to see how well markets have lifted themselves up again after that turryvee the other week, that saw them drop so far? Obviously the drop was an aberration and everything is heading up again towards new highs.......Or perhaps not.

In fact, there's no "perhaps" about the "not". This is a dead cat bounce without a doubt. It's possible things may continue upwards for another few days, but by November's end I suspect prices will be quite a distance lower than they are at the moment as the bear tightens his grip.

Seemingly Yank investors are "more complacent than in 2007" according to the Wall St Journal, and you know how that attitude panned out for them from November of that year till March 2009! (And it took till mid 2013 before prices had recovered to their 2007 highs....) Meanwhile, CNBC says that "(American) savings rates have slumped" - and they weren't exactly that high to begin with. In California, the same CNBC tells us that house prices are down 18% year on year, which of course is quite a drop by any standards. Further to the east, it seems that New York City's public employee pension fund faces a $103bn deficit, with a mere $5bn left in the kitty. The place is de facto bankrupt of course, not that anyone will ever admit it. Oh - and just one more thing that rather proves things ain't too healthy under the surface in Dodgydonaldland - the Fed plans to "ease" capital requirements for banks. If that's good news, I could swear that the elephant flying past my window a moment ago, was wearing the wrong tartan.

Back in Blighty, 'tis no surprise to read that St Theresa the Useless is "nearing" a deal anent the Irish Brexit border question. After all, she has promised Arlene the Terrible another £1billion of dosh on top of the £1billion already in play. I make that £200m for each Northern Ireland MP she's bribing...... Is it a surprise to note that Nicola Krankie's lot in Edinburry are a wee bit miffed? Are we facing the breakup of the UK? I certainly hope not, but it's looking more likely by the day quite frankly.

The UK's High Streets are certainly breaking up at an ever increasing pace - and I don't just mean the potholes that keep proliferating. The British Retail Consortium (BRC) is suggesting that 200 UK shopping centres are "in crisis", although I suspect the true number is much higher than that figure. Debenhams seems to be issuing 4000 P45s, Asda 2500, Mothercare a paltry 250, and so it goes on.

Likewise, how many new cars have left your local showroom of late? I see too that a big Yorkshire butcher (Crawshaws) is bust, with 700 jobs on the line. Can we blame vegans for that one, I wonder? It's not at all funny of course, but it does seem to me that an awful lot of easily led millennials are being brainwashed into developing an antipathy towards red meat consumption. La famille Williams is immune, thank goodness!

In Blighty's property market, it appears that a big "peer to peer" buy to let lender (Lendy) is in a bit of bother according to the Torygraph, with 60% of its borrowers in arrears - the shape of things to come methinks, not least because the Crazy Canuck at the Bank of England is suggesting interest rates will rise. He's right of course, but not because his lot have any influence over the matter. As I have often banged on about in these ramblings, 'tis Mr Market who sets interest rates, not central banks. They merely follow what the markets have already decided upon. Bond prices fall, ergo interest rates rise, and vice versa. I see that across the Pond, US 30 year Treasuries (the main driver of US interest rates) were at just a whisker short of yielding 3.5% on Friday as the bonds themselves lost a wee bit more capital value - very much the shape of things to come! The Brexit disaster is going to see UK gilts fall in price, and thus the interest rates thereon will rise. It's that simple really, and the process will certainly add some fuel to the entire Brexit conflagration!

Anyway, that's enough of the gloom and doom section of these mutterings, so let's look at some of the sillier stuff noted over the past week or so.

First was a piece (I think in the Grauniad) written by the head honcho of Waitrose, wherein among other fairly spurious claims, he mentioned their 1990s introduction of a "bag for life". I'm not sure he was wise to bring that up, given that "life" for the bags involved only nine shopping trips on average. Duh.

Then there was the thing about these unsold Centre Point flats being taken off the market. It appears that nobody was willing to pay £1.8m for a one bedroom version, or £55m for a penthouse. Offers seemingly were "detached from reality" according to the sales company's head honcho. Hmm, methinks 'tis the asking prices that are detached from reality.

Next, it seems that some drones being used by police forces, are failing to proceed. A spokesman for one of the forces involved suggested to the Torygraph that "Having them not fall out of the sky is important." Gosh, you don't say!

In Sweden, it appears that over 4000 people have now had microchips inserted in their hands "to make life more convenient". Perhaps (and hopefully) only Swedes are stupid enough to go down that route, especially given that the company doing the chipping goes by the name of Biohax.....Think about it!
Finally - shock, horror! - it could be that Robert the Braveheart Bruce was actually an Essex man. I'm not sure how that claim will sit with yer average independence-minded twit, but I confess to finding it hilarious, especially if it turns out to be correct!

Enough nonsense then, and onward to some charts as usual.

First there's a look at Land Securities, following a mentoring email from "Rob". Thanks for that, Rob, and your analysis is just fine! Next, for all you US market followers, there's similarly a countertrend channel on the chart of Snap. Then there's a look at GE, where the channel has been probed, retraced, and away it went - just to show you how such things tend to pan out.... Yes, 'tis all bearish today folks, but you can't deny I did also predict the earlier dead cat bounce! Finally, the falling wedge on the S&P 500 chart has been broken to the upside, not unexpectedly as Dips have been buying the dip as per usual. Nevertheless, this too is a dead cat bounce and given Friday's action, the upwards push may be finished already, with much lower prices ahead. Time will tell....

OK - that's all for this weekend folks - 'tis time to go and check if my amateur plumbing efforts have stopped a leak at the water supply. If not, I'll have to get all wet and muddy again.... Or just call a proper plumber tomorrow of course!

Anyway, all the best, and happy trading till next weekend.
Ian.

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'IMPORTANT NOTICE: This information is for EDUCATIONAL PURPOSES ONLY. It represents only MY understanding of what is happening in the market for any particular share, stock, commodity or index. In NO circumstances should it be construed as recommendations to trade. If I choose to trade what I see, that is MY decision. YOU must, in turn, come to YOUR OWN conclusions about what action, if any, YOU might choose to take'.

 

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