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, searchable archives, chart analysis and one-to-one mentoring on your trading.
So what's new at the end of the first week of September then? Not a solitary thing, basically! Sure, "things" in general are still developing, but there's nothing in the markets arena that one could call "new", nor "different", and certainly not "earth-shattering". Yes, volatility (as often predicted in these ramblings) is beginning to pick up as autumn progresses, but we're not there yet...... Nevertheless I'm confident that things will be very different before Christmas comes around! Oops - there you go folks - the first mention of the "C" word! Mind you, John Lewis has beaten me to it.....
Seriously though, this autumn is likely to be a real doozie overall, to use one of the Yank brother in law's favourite words. Seemingly August was the least volatile trading month in fifty years, claims said b-in-l, and although I'm nowhere near sad enough to have compiled such a statistic, I can believe him. Complacency, ignorance, and a strong belief in the Sort Everything Fairy, have all conspired to create that situation - not to mention the glorious summer weather. But let's not be lulled into that false sense of security, folks! Lots of stuff of a thoroughly unpleasant nature will push through the surface tension of these remarkably calm waters to create a veritable tornado of volatility as the rest of the year progresses.
There you go - another really scary prediction, courtesy of my Really Scary Granny's crystal ball!
Seriously though, there are things bubbling up that will inevitably cause ructions in the markets. Yes, yes, I know! I have been saying so for years, yet still things jog along quite merrily, so obviously I'm well off channel with these remarks. Well, the main reason why things are taking so long, is not because I'm off channel. It's because the level of complacency exceeds all reasonable expectations, and because - as a result - overall social mood has been at almost euphoric highs for many years. Such emotions take time to change, but believe me, the change is in the air now, and when social mood changes it can do so extremely quickly. It will be interesting to learn on Monday morning, for example, what percentage of the Swedish general election vote goes to the Sweden Democrats - an extremely anti-immigrant party.
And that comment brings me back once again to the real elephant in the room, Italy. The recent elections there have permitted a fundamentally eurosceptic bunch to hold the power now, and along with their anti-euro stance is an anti-immigrant one. I'm sure I don't need to go into all the stuff surrounding "immigration", but it's pretty clear that throughout Europe, more and more voices are being heard, their theme not only being against further immigration, but even "send 'em all back whence they came." The new Italian government is at the forefront of this "new normal" and the reason these so-called populist parties are gaining so much traction almost everywhere, is "darkening social mood". The herd of complacent, tolerant voters is becoming restless, and as has always been the case, such restlessness could easily become a stampede as the "feeling bad feeling" gains momentum. Once we see that process take over, markets are going to see a serious correction at best and a massive crash at worst. Ain't gonna happen? Don't be so complacent!
Speaking of complacency, what about pensions provision? Have a read of this piece and shudder - likewise, ensure you take full responsibility for your own retirement planning.
Scary or what?
Back with the day to day stuff, I note that Ford is going to dump the Mondeo (not that bad a car overall however) and thus also dump 24000 jobs. Another job that has been lost is that of the TSB's head honcho after the (ongoing!) IT fiasco there. Despite his gross uselessness, he'll still see his own bank balance increased by a measly £1.7m. The benefits of miserable failure, eh?
Still on the topic of incompetence, I note that Saint Theresa The Useless and her band of equally useless acolytes reckon that Blighty is going to get a fantastic deal from Brussels anent Brexit. They're encouraged by the EU chappie's hint that if the £39bn divorce bill is paid, a free trade agreement might just possibly still be on the table. Are they mad to believe that? You decide! Certainly, Bojo The Heretic ain't buyin' it.
I see that everyone's favourite bank, RBS, is going to close another 54 branches. Why bother keeping any at all? Surely everyone should just bank online these days, and allow the hackers to nick their dosh with impunity? In truth, 'tis my firm belief that all online banking should simply cease. It's not necessary, and if bankers could just be reminded that they're supposed to serve the public, maybe that lack of necessity could better be implemented. Just as lots of wee post offices are now located within supermarkets, so too could be wee bank branches, within easy reach of most people. The hacking industry would be somewhat hobbled and surely that's a good thing? And I care not a jot for all the verbal garbage that comes out of banking mouths, claiming that their online security is the best there is and we don't have to worry. Liars all.
It's not only banks of course - how about these 380000 BA customers whose financial data has been compromised?
Back to Italy for a moment, via Cyprus. On Friday, the Bank of Cyprus' "CoCo" bonds were yielding 12.5%. (These are bonds, the holders of which are guaranteed to get shares in the bank should things go pear-shaped for the bonds. Hmm, if the bonds go belly-up, how would that affect the share price I wonder? Duh.) Now, how stable an investment do you reckon is a 12.5% yielding product? And how stable then is Italy, given that its bonds now yield over three times what they were paying just two years ago? Everything is interconnected these days, and my questions might be "How much Italian debt is held by the banks of other countries, including Blighty, and how will a collapse in Italian bond prices impact British banks?" Time alone will tell.......
Across the Pond in Dodgydonaldland, I see that US 30 year Treasuries are falling in price - that's to say, the yield thereon is rising, so it's likely that overall interest rates there will increase this autumn, making debt harder to service. And we all know about the debt levels - well, at least you folks know, because I have been banging on about the matter for long enough!
OK - that'll do for this weekend's scary stuff, so onward to a couple of sillier bits and pieces.
How about that new £28m school in Dumfries? Opened two weeks ago for the new term, closed on Friday for "safety reasons" because it's already falling apart. Builders, eh? Then - still with building - Denmark is the location of some new "easy clean dog-friendly apartments". The mind boggles.
Next, I note that Charlie Windsor obviously is a bit of a party animal. When is he 70? November some time, isn't it? He has started rather early, eh?
And here's an economist's comment I read somewhere, concerning Argentina - "No country, if properly mismanaged, is immune to hyperinflation". So you can properly mismanage something then? That's a new one on me! Perhaps it will give a degree of solace to Saint Theresa The Useless?
OK folks, that's yer lot for this weekend, but before moving on to look at some charts, a note about ESMA rules and their effect on some of us. You'll be aware that I'm no fan of excessive leverage and in that sense I have no problems at all with these new regulations. However, I'm aware that the matter concerns some of you. As far as margin requirements go, it's fair to say that intraday forex trading of the "big three" (EURUSD, GBPUSD and EURGBP) isn't too onerous financially, so I'll do my best to look at these from time to time for you, and of course you can email me for assistance as you might wish.
Onward then to some charts, and first today there's another look at Highland Gold, featured here last weekend. It looks as though a countertrend channel is forming. Next, a "big picture" triangle on the Watkin Jones chart suggests that a break to the upside is on the cards. Then there's a look at a wee rising wedge on the chart of the Dow Composite index, followed by a much bigger one on the S&P 500. It's interesting (scary!) to note that only ten stocks out of five hundred, have accounted for all the push upwards in this index, for all of 2018 so far. A healthy bull market? You decide!
All the best then, till the 23rd.
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