The "What Ian Can See" WICS trading information newsletter - previous edition.
Ian's weekly look at the world economic situation. Members get access to the current edition, searchable archives, chart analysis and one-to-one mentoring on your trading.
Hello again, and welcome to February! Is this to be the month when at long, long last, the Big Drop begins? Certainly, Friday's DJIA drop was a bit of a doozie at 665.75 pips downwards - the largest fall since 1st December 2008 in fact. You may recall that year being described in "financial crisis" terms. The volatility aspect of stock markets is coming back now, but just be aware of FoMO and the likelihood of dip buyers trying to get in. (FoMO = Fear of Missing Out.) In other words, we may not necessarily be quite "there" yet. Fear not however, there are loadsa pips to be seen below current prices and plenty trading opportunities to come!
And speaking of drops, you may recall an IW suggestion that Bitcoin is on the road to ruining an awful lot of the sheeple. So far, it's down a mere 54% from its peak....... Again, the dip buyers will be practising their dippy skills and will probably cause a bit of a retrace, but over the piece, it will prove to be dead in the water in my opinion. (Just remember now folks - the word there was "opinion".)
What else has seen a February fall so far? Quite a lot really - just about everything where sentiment is still hugely bullish in fact, not to mention the likes of US Treasuries, which have been sliding down a slippery slope for some time now. With yields on ten year bonds at 2.75%, and 3.09% on the thirty year version, they pay over twice as much interest as they did only two years ago! (Which of course means their capital valuations are sliding.)
Here's a very interesting piece to consider - the author says the chart therein "could imply a multi-year bear market" and that's the only part of his piece I disagree with. It DOES imply a multi-year bear market to come, although you mustn't forget that "imply" doesn't mean "guarantee". There again, I reckon I CAN guarantee a huge bear market is about to hit all the bulls out there, and this chart is merely another piece of the jigsaw that adds some more strength to my contention.
Make of it what you will......
I note too that the University of Michigan's "confidence index" has dropped to its lowest level since it became clear Dodgy was heading for the White House, while the "total weekly hours worked" by the Yank labour force, is down 2.9% year on year.
Meanwhile, back in Blighty, the "director of policy" at Royal London, Britain's biggest mutual assurance company (over £100bn under management) said in the Torygraph the other day "It's not IF there will be another Carillion, it's WHEN", and of course he's bang on the money with that statement I reckon. Interestingly, Carillion's auditors (KPMG) are to be investigated over their role these past years. All these big auditing companies are pretty suspect in my view - too much fee income depends on favourable reporting.......Speaking of which, I note that the online estate agency known by the amazingly silly name of Purplebricks, is being accused of "manipulation of the numbers" when it comes to its ability to sell property, and its actual profitability. Frankly, I don't care how big it is, with a name like that it has zero credibility and I don't doubt its shares will continue to be a pretty poor investment overall.
Back to the Carillion bankruptcy for a moment, and the UK's Pension Protection Fund people say that 3710 British company pension schemes are in deficit to the tune of over £300bn. Hmm.
Blighty's High Streets continue to suffer, allegedly in the face of online competition, and even Markies is closing fourteen shops this year. Meanwhile, figures from the British Retail Consortium say that the "Big Four" supermarkets have shed over 25000 jobs in the last couple of years.
Perhaps some of these folk can retrain as BT engineers? Seemingly, another 3000 are to be hired by that company, to assist in the rollout of "superfast" broadband. Where
will BT find these folk, I wonder? Duh.....
Elsewhere, one of the world's biggest financial institutions (Deutsche Bank) has just declared its worst earnings in seven years. Maybe its auditors need to be fired for honesty?
And elsewhere again, I see that Venice has thought up a cunning plan to raise cash, having just fined a restaurant €20000 for having overcharged some tourists for lunch. There again, €1100 to feed and water four Japanese students was maybe a wee bit on the profiteering side......
Speaking of the EU (sort of), you'll doubtless have noted the total lack of IW contemptuous remarks about Brexit, these past few issues of the ramblings. Does that mean I have come round to accepting it's all going to be just fine? Nah, I'm just utterly bored with Notmaggie and her team's total uselessness. Here's an amusing piece courtesy of The Independent for you to ponder.
Ho ho ho. There again, 'tis not really funny, is it?
But this IS funny - Jeremy The Mad says he'll buy a house for every homeless person in the UK. Well, maybe not in Scotland, but everywhere else. Ho ho ho. He must have an awful lot of pocket money handed to him every weekend by the folks in charge of the asylum.
Then there was the BBC photo of a toilet that had been left in a Glencoe layby. Clearly it's part of Nicola Krankenstein's commitment to improve the infrastructure for the benefit of visitors to Scotland's rural areas. I wonder if she dumped it there herself?
Next was the plea by the boss of Glenmore Lodge near Aviemore, at the foot of the Cairngorm mountains, where every year, more than a few walkers lose their way, and some of them don't survive the experience when they variously fall over a cliff, drown in a flooded burn, or die of hypothermia in a blizzard. His request is a simple one - walkers should check the weather forecast before setting out. It's hard to imagine that anyone wouldn't check the forecast when heading for the mountains, but the Glemore Lodge boss obviously knows very well that there are many idiots around....And it's people like him and his team who have to risk THEIR lives in setting out on rescue missions.
Finally, it seems that the planet's magnetic poles have a tendency to "flip" quite regularly every 300000 years or so - that's to say, the south pole becomes north and vice versa. Allegedly - should it happen - electronic stuff will cease to operate. Interestingly, the last "flip" happened around 780000 years ago, so either we're long overdue another one, or the politicians have managed to have the whole thing cancelled altogether. We shall see..... But if I were you, I would have a stash of food and drinking water handy, just in case. Imagine if you couldn't pop to the supermarket because their tills had failed and you had no petrol for your car anyway? Oh, the fear.......
Nae fear of me getting too bothered by it all though!
Anyway, enough of the nonsense - onward to a chart or two. First there's a look at that of Purplebricks, seeing I adopted a somewhat cynical demeanour towards it earlier. Short term, it's sporting a nice enough rising wedge, out of which it has now fallen. Next, and again since I mentioned it earlier, Deutsche Bank. You can see the recent price drops well enough as it heads again towards the bottom of its sideways channel, but there's a reason why it holds no trading interest for me...... Onward then to Balfour Beatty, speaking of "the next Carillion" earlier. NB - I am NOT saying that will be the case, but what I am saying is there's a sideways channel with an upwards move out of it that died pretty sharpish. I'm looking at the lower channel line now as being significant, and although this is all about the charts as you are well aware, this one's pensions liabilities are a heck of a lot more than the valuation of what's in the pot...... Finally, the Dow (DJIA), having touched on magnetism above. Is this the Big One? We'll see - there can be a magnetic attraction towards earlier gaps on this kind of index, so the price could fall a bit further next week, but I suspect that a bit of FoMO action might ensue, so the Big One might yet be deferred for a while.
OK - that's enough meandering inconclusively for one weekend. I'm off to meander inconclusively around the new Williams policies, still trying (unsuccessfully so far) to work out quite what to do with them......
And on that wishy washy note, happy trading till next weekend.
All the best
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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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