A good article on CNBC that has very useful thoughts for traders as well. The five key points:
1. ‘TRY ON’ A POSITIVE LENS
2. TAKE NOTE OF THE COMPANY YOU KEEP
3. TURN OFF THE NEWS
4. WRITE IN A JOURNAL FOR A FEW MINUTES EACH DAY
5. ACKNOWLEDGE WHAT YOU CAN — AND CANNOT — CONTROL
Obviously the turning off the news is not feasible for a trader, but acknowledging what we can and cannot control is vitally important.
Thursday, August 24, 2017
German car-makers are bid up
Merkel endorsement of diesel engines lifted BMW, DAI and VOW shares. DAI is the best performer today, but BMW technically looks a bit better. The big question is what surprises the cartel scandal still has to offer. On the other hand, I'm sure that German politics would do everything to protect the battered industry, and we should not underestimate the power of that.
Tuesday, August 22, 2017
Asset Rotation and the SPY
Utilities (XLU) were bottoming in early July and were in an uptrend since then.Consumer discretionary ETF (XLY) topped in late July after a rejected breakout and is in a downtrend since then. After these worrisome signs SP500 (SPY) had a false breakout in the beginning of August. Now both XLU and XLY are at an important level.
Monday, August 7, 2017
Valuations at glance
Some pundits say that valuations are very stretched. I don't think so because of two reasons:
- The earnings estimate is very ambitious that seems to be underpinned by economic data.
- We cant see any inflationary pressure that could trigger significant increase in L/T yields and discount rates.
USD could start bottoming
USD Index is approaching an important weakly level that is a major resistance.
Some Macro Charts
I took a long break in both trading and blogging, so it is time now to start it again slowly ...
Perhaps the best is to start with is taking a look at some macro charts that could tel something about the big picture.
CPI
CPI figures are important for me in two ways: a) central bank policies are closely linked to this data b) development in CPI differentials are good FX indicators.
It looks as if the increasing trend started somewhere last summer is showing some reversal pattern. This is the strongest in the US that could very well underpin the USD weakness started early this year. Japan is doing relatively well, but the basis is very low indeed.
GDP
We can't pick some obvious global trend on the GDP front. The most striking is the jump in CAD data. What is good that all the readings are above 1% and the gap is narrowing that could also fuel the USD weakness.
Industrial Production
I follow closely the US and EU data.
The jump in the EU data could support the EUR rally we saw recently.
Retail Sales
In the US the data started to go sideways, whereas in the EU we see a strong uptick narrowing the gap.
Data source: I download the data from www.forexfactory.com to Excel where I process it further
Perhaps the best is to start with is taking a look at some macro charts that could tel something about the big picture.
CPI
CPI figures are important for me in two ways: a) central bank policies are closely linked to this data b) development in CPI differentials are good FX indicators.
It looks as if the increasing trend started somewhere last summer is showing some reversal pattern. This is the strongest in the US that could very well underpin the USD weakness started early this year. Japan is doing relatively well, but the basis is very low indeed.
GDP
We can't pick some obvious global trend on the GDP front. The most striking is the jump in CAD data. What is good that all the readings are above 1% and the gap is narrowing that could also fuel the USD weakness.
Industrial Production
I follow closely the US and EU data.
The jump in the EU data could support the EUR rally we saw recently.
Retail Sales
In the US the data started to go sideways, whereas in the EU we see a strong uptick narrowing the gap.
Data source: I download the data from www.forexfactory.com to Excel where I process it further
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