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Macro

Trump Continues To Identify "Trade Foes" Ahead Of Meeting With Putin


Morning Briefing July 16th 2018


Yes the World Cup is over and it's not coming home, well, at least not to London. The calendar nonetheless trundles on starting with a double release in Spain at 0700 of industrial orders and services survey.

Industrial orders previously grew by 4.8% on a y/y basis. The services survey previously reported growth of 4.1% y/y.

Next up is the Euro Area trade balance at 0900GMT. The seasonally adjusted trade balance was previously E18.1 bn.

At 1230GMT is retail sales in the states and the empire state manufacturing survey. US retail sales rose by 0.8% m/m in May. The empire state manufacturing survey previously had an index reading of 25.0.

Canada also at 1230GMT release their international Canadian transaction in securities. The prior securities transactions stood at C$9.1 bn.

Business inventories in the US is at 1400GMT which had previous m/m growth of 0.3%.

Global Economic Trading Calendar


Markets


SNAPSHOT: Below gives key levels of markets in the second half of the Asia-Pac session: - Nikkei 225 closed - ASX 200 down 25.891 points at 6242.5 - Shanghai Comp. down 13.426 points at 2817.758 - JGB 10-Yr future closed, cash JGBs closed - Aussie 10-Yr future down unchanged at 97.365, yield up 0.1bp at 2.63% - US 10-Yr future down unchanged at 120.11+, U.S. cash Tsys closed

US TSYS: T-Note futures have operated in an extremely narrow 2+ tick range, with cash Tsys closed for the Japanese national holiday, and scheduled to re-open for London trade. - The space has had little/no reaction to Chinese GDP & activity data, with the eurodollar strip trading virtually unchanged at the latest count. - Retail sales provides the U.S. highlight on Monday, with most looking to the Q&A section of Fed Chair Powell's semi-annual monetary policy report due Tuesday & Wednesday. There was no new ground broken in the release of the text of Fed Chair Powell's semi-annual MonPol report (released Friday), highlighting that policy remains accommodative, set for further gradual hikes.

JAPAN: As a reminder Japan will observe a national holiday on Monday, with markets closed.

AUSSIE BONDS: The space moved to fresh lows after the AOFM launched its new 2.75% 21 May 2041 Treasury Bond, which was expected this week. The AOFM noted that "initial price guidance for the issue is a spread of 39.5 to 44.5 basis points over the implied bid yield for the primary ten-year Treasury Bond futures contract." Initially the IPT generated little follow-through (as the guidance was in line with the majority of estimates), but 10-Year futures have since made fresh lows, as the 20-Year sector dragged the space lower, before the complex stabilised and edged back away from lows. - The domestic 3-/10-Year yield differential last trades at 57.0bp. - 3-month BBSW fixed 0.12bp higher today, with the Bill strip last trading unchanged to 2 ticks softer after some early pressure.

STOCKS: Asia-Pacific indices couldn't latch onto the modest bid observed in U.S. futures, giving way in the first session of the week, with Japan out on holiday. - The Hang Seng shed around 0.5% with the health care sector leading the way lower, with only IT & utilities in the green, with some question marks hanging over the eligibility of some HK shares for southbound investment out of China. ZTE outperformed, following the U.S. lifting the ban on the company's operations after a $1.4bn fee was paid. - The CSI shed some 0.9%. - Australia's ASX fell by 0.3% with health care once again leading the way lower, although the heavyweight materials and financial sectors also weighed.

OIL: Crude edged lower overnight with reports of Saudi offering additional crude stocks to Asia adding additional weight after a report on Friday pointed to the Trump administration considering a tap of the SPR to push prices of gasoline lower ahead of the U.S. mid-terms. - The latest Baker Hughes rig count data, released Friday, pointed to an unchanged number of active U.S. oil rigs.

GOLD: Gold continued to operate sub-$1250/oz, sticking to a narrow range overnight.

FOREX: USD/CNH's move back above CNH6.7000 after a brief foray below saw AUD/USD & NZD/USD off of highs around the release of in-line with exp. Chinese GDP data, coupled with a softer than expected Chinese industrial production reading. - The JPY crosses had a couple of notable moves, one in either direction, but lacked any real conviction against a backdrop of low liquidity owing to the Japanese national holiday. - GBP/USD added around 20 pips to trade at $1.3240 last, with resistance noted at the 76.4% retracement of the move from $1.3285 to $1.3103/July 12 high ($1.3242/45), followed by the 61.8% retracement of the move from $1.3363 to $1.3103 ($1.3264). - USD/TRY has failed to test the pair's all time high after Turkey was downgraded to BB, outlook negative, on Friday.

Technical Analysis


 BUND: (U18) Below 162.26 To Shift Focus Lowe

*RES 4: 164.52 Low Sept 1 now resistance
*RES 3: 164.19 2018 High May 29
*RES 2: 163.32 Bollinger band top
*RES 1: 163.22 High July 13

*PREVIOUS CLOSE: 162.95

*SUP 1: 162.82 High July 12 now support
*SUP 2: 162.40 Low July 11
*SUP 3: 162.28 21-DMA
*SUP 4: 162.26 Low July 10   

*COMMENTARY: Fresh 6-week highs to end the week add support to the case for a test of the 164.19-54 region where 2018 highs and the weekly bear channel top off 2016 highs is located. Bulls need a close above the bear channel top to shift focus to 166.40 2017 highs. Bears now need a close below 162.82 to gain breathing room and below 162.26 to confirm a break of the 21-DMA and shift initial focus to 161.26-75.

EUROSTOXX50: 3418.06 Support Key This Week

*RES 4: 3501.89 55-WMA
*RES 3: 3482.25 55-DMA
*RES 2: 3480.44 High July 10
*RES 1: 3466.26 High July 13

*PREVIOUS CLOSE: 3454.54

*SUP 1: 3418.06 Low July 12
*SUP 2: 3389.44 Alternating daily support/resistance
*SUP 3: 3342.46 Bollinger band base
*SUP 4: 3340.50 Low June 27

*COMMENTARY: The recovery from June lows stalled ahead of the 55-DMA with correcting O/B studies increasing the risk of a correction back to the 200-WMA (3323.08). Bears now need a close below 3418.06 to shift initial focus back to 3340.50 June lows. Bulls now need a close above the 55-DMA to gain breathing room and above the 200-DMA (3512.43) to hint at a move back to 2018 highs.

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This article is from Eurex Exchange and is being posted with Eurex Exchange’s permission. The views expressed in this article are solely those of the author and/or Eurex Exchange and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

 

 


 


19092




Technical Analysis

AUDUSD Weekly MACD Green Line Flattening


The AUDUSD is edging higher in today's Asia morning after Friday's daily Hammer, continuing to make efforts to reverse higher within the 6 month downchannel (on the weekly chart).  A decisive green weekly candle this week following last week's weekly Doji would likely coincide with a test of the weekly chart downchannel resistance.  Significantly, the AUDUSD may be in the early stages of forming a Double Bottom (on the weekly chart) with the current July low roughly equal to the May 2017 low.  Today's 830am EST US Retail Sales m/m and Core Retail Sales m/m figures could set off the beginning for this week's rally higher, but the more important RBA monetary policy minutes will be released at 930pm EST.  The weekly, daily and 4hr RSI, Stochastics and MACD are bottomish, rallying or consolidating recent gains.  I am looking to go long in the green zone (of the daily chart), targeting the red zone for Tuesday.  The amber/yellow zone is where I might place a stop if I was a swing trader (although in my personal account with which I seldom hold overnight I set my stops tighter).
 
AUDUSD Weekly/Daily/4hr
 
 
Click here for today's technical analysis on EURUSD, GBPUSD
 

Tradable Patterns was launched to demonstrate that the patterns recurring in liquid futures and spot FX markets can be analyzed to enhance trading performance. Tradable Patterns’ daily newsletter provides technical analysis on a subset of three CME/ICE/Eurex futures (commodities, equity indices, and interest rates), spot FX and cryptocurrency markets, which it considers worth monitoring for the day/week for trend reversal or continuation. For less experienced traders, tutorials and workshops are offered online and throughout Southeast Asia.

 

This article is from Tradable Patterns and is being posted with Tradable Patterns’ permission. The views expressed in this article are solely those of the author and/or Tradable Patterns and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

 


19091




Macro

GUOSEN Closing Bell (July 13)


MARKET

China stocks were mixed after the close on Friday, the Shanghai Composite lost 0.22%, while the SZSE Component index added 0.57%; In Shanghai sector, as gains in the Travel & Leisure, Technology Hardware & Equipment and Technology sectors led shares higher while losses in the Banking, Financials and Oil Equipment Services & Distribution sectors led shares lower. In total, both markets traded 366.1 billion RMB, up 9.75% dod.

 

 

Open

Close

% Change

(bn yuan)

Shanghai

2831.18

-0.23

146.30

-14.39

Shenzhen

9326.97

0.58

219.72

-15.52

CSI 300

3492.69

0.33

99.80

-13.35

ChiNext

1618.46

0.24

86.90

-7.66

 

Sector

Top 1

Led by

Top 2

Led by

Upward-leading

Food & Beverage

000596

Healthcare

002653

Downward-leading

Shipbuilding

600150

Textile machinery

600843

 

NEWS

*China's central SOEs deliver strong performance in H1

China's centrally-administered state-owned enterprises (SOEs) reported fast profit growth in the first half of the year with a lower debt-asset ratio, data showed Thursday. Combined profits of China's central SOEs totaled 887.79 billion yuan (133.1 billion U.S. dollars) in H1, up 23 percent from a year earlier, the State-owned Assets Supervision and Administration Commission (SASAC) said. The growth rate was 2.1 percentage points higher than the pace in Q1. (Sina)

*Globalized investment to China is bullish: Standard Chartered

The survey in March gathered responses from over 180 investors, regulators and custodians in Asia, Europe and North America, gauging their views on issues impacting investors wanting to access China's onshore markets. Eighty-eight percent of the interviewed investors said they were currently investing in China, up from 69 percent in 2017. Among those investing in China, 76 percent said they would increase their China investments, up from 69 percent in 2017. Simplicity, clarity and flexibility of new access mechanisms such as Stock Connect and Bond Connect were the main reasons for the positive sentiment.Over three quarters of the respondents said that the new channels have greatly influenced their decision to increase their investment. When considering future investment, 43 percent plan to use Stock Connect and 23 percent Bond Connect. (Xinhua)

 

FUND FLOW

 

Click here for more information about Guosen.

This article is from Guosen Securities Co., Ltd. and is being posted with Guosen Securities Co., Ltd.’s permission. The views expressed in this article are solely those of the author and/or Guosen Securities Co., Ltd. and IB is not endorsing or recommending any investment or trading discussed in the article. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

 


19090




Macro

Interactive Brokers - Examining the Differences Between Tesla's Equity and Bond Prices


Interactive Brokers chief options strategist Steve Sosnick discusses what investors might be reading into the difference between Tesla's equity and bond prices.

The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.


19061




Technical Analysis

ChartSmarter - ChartSmarter Friday Game Plan 7/13/18


Markets:

Do not look now but the Nasdaq is back above the round 7800 number, more importantly on a CLOSING basis, something it was unable to do on the 6/20-21 sessions. The latter finished nearly 100 handles off its intraday high. It now negates the bearish engulfing candle from from that 6/21 day, and bulls are feeling energized. Their is truth in PRICE, and as good as it looks I would still like to witness a couple of CLOSES above 7800. I am giving my own healthy skepticism, which is probably a very good contrarian sign that we are going higher.


The S&P 500 is has now gained ground 8 of the last 10 sessions and the last 6 advancing days CLOSED right at the top of the daily range. The most hated bull market keeps moving right along ignoring all opinions. It is looking to finish above the round 2800 number for the first time since 2/1, and the action since the beginning of February can now be interpreted as a bullish ascending triangle and a move through 2800 carries a measured move to 3050.
Sectors:

Technology was a welcome winner Thursday. The XLK rose by 1.6% and is now just above a 72.53 short cup base trigger. The very tight ranges the first three days of the week we mentioned yesterday, could well have been a short rest to gather stamina and resume its uptrend. Volume is still a bit on the light side, but the ETF is up 2.2% this week heading into Friday and looking for its second consecutive 2% plus weekly gain as it jumped 2.3% the prior week.


It is still a bit premature to declare the staples and utilities as lagging. But this is another session were the were the worst performers of the major S&P sectors. The XLP and XLU were very close to the UNCH mark Thursday. The XLP is at a critical juncture here as it sits right at 200 day SMA resistance, a line it has been below for 5 months with the exception of a couple days in February that proved to be a bull trap.

Special Situations:

The economy continues to chug along and of course there will always be arguments on both sides of its merit. The quote from Ralph Waldo Emerson comes to mind, “There are always two parties, the establishment and the movement.” Perhaps the naysayers, I am not in the camp, could point to the strength in the chart below of KAR, a used car auctioneer. This is how is was presented in our Tuesday 7/10 Game Plan. It is on a 6 session winning streak, with each day CLOSING right at the top of the daily range, a hallmark bullish trait. A cup base trigger of 56.85 was taken out on 7/9 and it is demonstrating great action POST breakout, just what you want to see from fledging breakouts. Is the firmness in the stock an indication of the reluctance to purchase new vehicles? From a trading perspective who cares. The chart is driving higher, pun intended.

ChartSmarter is a website dedicated to the art of technical analysis. We focus on both daily and weekly timeframes with a strong emphasis on Japanese candlesticks. Incorporated into our work is the use of traditional technical strategies such as head and shoulders, triangles, gap fills and round number theory. Inside each daily report we highlight 5 names on both the long/short side depending on the overall market conditions. 

The author has worked within the financial industry for more than 25 years, but for the last 8 has centered in primarily of trading capital using technical analysis.

The opinions expressed by the author are his own. Trades or positions discussed by the author are neither a solicitation to buy or sell a security, nor are they investment advice. Recipients should always do their own due diligence before buying or selling a security. Every reader is responsible for his/her decision to buy or sell a security.

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from ChartSmarter and is being posted with ChartSmarter’s permission. The views expressed in this video are solely those of the author and/or ChartSmarter and IBKR is not endorsing or recommending any investment or trading discussed in the video. This material is for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IB to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

 


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