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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.

January 13th 2019

Hello again, welcome to 2019, and a somewhat belated Happy New Year to all those to whom I haven't yet wished it! I hope you had an enjoyable and peaceful festive season, and that you're once again raring to go as regards getting some profitable trades running. I trust too that you're managing to stick to whatever New Year resolutions you may have made - I made only one and so far all is well. Mind you, my resolution was not to worry if I broke any.....

So what's new in 2019 then?

I think it's safe to say "absolutely nothing!" It's just more of the same old 2018 Brexit messup-dominated stuff I'm afraid, with Theresa the Zombie staggering on relentlessly towards the end of March. My family's after dinner games of pontoon over the holiday employed her words quite a lot - deal, no deal, twist, see you, fold etc etc. Ho ho ho. Our stakes were no more than plastic chips, Theresa's are made of empty promises and wishful thinking.

On the topic of empty promises, it was either amusing or shocking (depending on your level of cynicism) to note that Failing Grayling, our wonderfully competent transport minister, has awarded a ferry contract that involves a bung of £13.8m, to a shipping company that has nae ships, a former bankrupt as a chief executive, a website that suggests you'll be compensated if your pizza order doesn't get delivered on time, and nae continental ferryport wherein to dock its non existent boatie. It would be hard to make this stuff up! Westminster's collective degree of utter incompetence beggars belief, and of course Mr Dustbyn and his bunch of loonie Marxists are just as bad as the other lot. What a mess eh? Democracy died an awfully long time ago, as I have touched on from time to time over the years. Here's a Grauniad piece that gives pause for thought.

Anyway, having dealt with the current Brexit situation, onward to matters of much more interest.

So how will the coming fishing season pan out?

Oh - sorry - you want to focus on economic/financial stuff, don't you?

Well, as mentioned above, little has changed so far. We saw that big pre-Christmas drop in the main US indices, which has been followed by a strong upwards bounce. Said bounce could well get a wee bit higher still but judging by falling intraday volatility and equally falling volume, the feline is staggering upwards on its last legs and pretty soon the dead cat bounce (which is what it is) will have staggered its last and the next big drop will begin. That could happen as early as the middle of this week in fact.

In Blighty, Jaguar Land Rover's pre-festives threat to dump some jobs this month, has happened as expected, with an initial 4500 P45s in the post. Hardly a good start to 2019 for a lot of people! And Ford too is dumping jobs as the worldwide car sales slump continues, while HMV has gone bust again - this time for good - while Mothercare is undoubtedly on its last legs. Hardy Amies has also gone down the pan for the second time, but that's nothing compared to Aston Martin's record! In fact, Begbies Traynor (an insolvency consultant firm) reckons that around 30000 UK retailers are "in significant financial distress" according to the Grauniad, with that scary number including 8500 online retailers. 'Tis indeed a bad time to be working in retail, while insolvency practitioners are busily polishing their certificates and rubbing their hands in anticipation. Another Grauniad piece claims that "Average UK household debt is now a record £15400". Some records are better not to be beaten, eh?

Back in the USA - "rescue package" or not - Sears is bust, as predicted here many months ago. Imagine eh - $193 a share in April 2007, 36.5 cents when the stock stopped trading the other day! That represents an awful lot of pain for an awful lot of people, not just Sears employees. Macy's can't be far behind....... Overall in Yankland I think we're all well aware that things are far from rosy, despite Dodgydonald's exhortations to "buy the dip". Yes, that dip is currently being retraced and prices could go higher still, but..... Here's a link to consider anent my "but" remark.

This latest dead cat bounce started with the current Fed chairman (Mr Powell) suggesting that maybe he wouldn't hike interest rates as much as he had previously suggested. Nothing to do with his job security of course, oh no, perish the thought eh? Have a look at this piece from Alhambra Partners and see what you think, anent my "dead cat bounce" view.

It's not just Dodgyland and Blighty of course - Germany "might be entering a recession" according to the Torygraph, while my sources there tell me the country is already in a serious downturn, economy-wise. In fact, here's a Bloomberg piece about the matter.

And with Deutsche Bank's chairman feeling the need to tell the world that "Deutsche Bank is strong. It needs neither a bailout nor a merger" you can bet that (as hinted in these mutterings more than once) 'tis teetering on the edge of the cliff. The $2bn bonus pot seems a tad on the over-generous side in the circumstances, but I expect it's just to pretend all is fine.

Speaking of troubled banks leads to Italy of course, where I reckon all such institutions are in a bit of a mess. The entire board of Banca Carige resigned over the festive season, and the ECB has had to step in and appoint what it calls "temporary administrators". Hmm.

OK - that's quite enough serious stuff for one weekend!

Onward to a few sillier bits and pieces before looking at a chart or two as usual.

First (and it's not so much "silly" as flippin' terrifying, given Theresa the Zombie's lot's precarious grip on power) was the shadow environment minister's Grauniad interview wherein she said "When I was little I thought I could be a scientist or an explorer..." But guess what? Yup, she became a politician with a "green" agenda!  She's promising "hundreds of thousands of new green jobs" as she makes Blighty carbon-neutral blah blah blah. I reckon her cunning plan is probably to get all these redundant retailers on to rows and rows of exercise bikes in huge sheds, pedalling like mad with dynamos attached to the things and feeding into the grid..... What do you reckon? Duh. She's a nutter, but there again, is that not to be expected nowadays when it comes to politicians?

Speaking of nutters, I see that a Flat Earth cruise is planned by the eponymous society. They're hiring a biggish cruise ship for the trip - I wonder if GPS will be used by the navigator? Ho ho ho.

North of the border, wee Nicola Krankie seemingly has "given ScotRail 8 weeks from Christmas to improve" according to the BBC. Or what, Nicola? Will you shut down the rail network? If you can't bite, don't bark, as my father used to say.

Another amusing thing that caught my eye was a letter to the Grauniad wherein the angry writer asked "Why did Aldi sell me a Christmas tree I couldn't carry?". My riposte would be "Why were you dumb enough to buy a tree you couldn't manage to take home?"

And how about the Torygraph's great investment idea given their concerns over share prices - buy designer handbags and get rich! Yup, that should do the trick now that Bitcoin is on the way out.
OK folks - that'll do for this weekend, other than to give you this link to one of my favourite rant topics, just to ensure you're aware I'm still capable of badmouthing global warmists......

Onward to some charts then, before we all freeze.

First today there's a look at Macy's, given my mention of Sears above. Lots of countertrend channels....

Next there's some nice horizontal support to be seen on the Card Factory chart. You know I'm not big on "fundamentals" but how many Christmas cards did you receive/send? Then - just to make the point that it's not all about bad news despite my overall bearishness, there's a look at Ocado. A buy trade just above £9 looks potentially viable, so why would you wait for £9.50? (If you're planning a buy, that is - it's certainly not for me to tell you what to do!) Finally, the S&P 500 index has stalled at more or less bang on 2600, with both volatility and volume falling away as this wee uptrend has progressed. It's these volume and volatility drops that help assess this latest upwards push as being almost certainly a dead cat bounce. However, the little triangle that can be seen now, may suggest one more (weak) push upwards before the bigger downtrend reasserts itself. We'll see!

That's all for this weekend folks - see you next weekend, and happy trading till then! (Don't forget you can email me whenever you want of course.)

All the best
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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