Market Wrap – Wed 23 Sep, 2015

A technical negative for oil and a discussion on international markets

Chris Temple is with us for today’s market wrap. We focus on oil then move into discussing the reactions so far in the markets to the fed not raising rates.

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Featuring:
Chris TempleCory Fleck
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Comments:
  1. On September 23, 2015 at 2:06 pm,
    A Listener says:

    Excellent comments guys.

    Chris I am in agreement 100% with your remarks on crude oil.

    The falling trend was confirmed today and should carry through for some days more as important support levels were broken and the minor bear pennant gave way. You phrased this entirely differently of course by noting an outside day (which I appreciated because I had not noticed it until you pointed that out).

    Meanwhile I am watching sugar again. Take note that a double bottom will form in the next days, possibly by weeks end, and a good entry point will again arrive for an upward reversal.

    The Euro is heading for a decline to 1.10 and change by Friday.

    That tells me the dollars rise will end then and next Monday could bring a solid up day in equity markets. That would coincide with the speech by President Xi of China. Something tells me we will NOT have a decline on the 28th September in US stock markets or for that matter in China where a bottom appears to be forming on the Shanghai.

    Only a complete fool would be short China come Monday.

    Rather we should anticipate a sharp rally off a low of 3100 on the SHCOMP and that would be a hat-tip to the President who will NOT stand to be embarrassed by his market falling on the very day he gives a key speech in the US.

    If it does fall, heads will roll. This is an easy-peezy trade set up.

    Gold meanwhile has one more chance to head higher come tomorrow. The US indices should continue to fall Thursday and Friday and (with luck) double bottom before the day is done.

    And that will make for a very good day on the 28th.

    • On September 23, 2015 at 2:14 pm,
      A Listener says:

      PS:…..I would not hold gold come Monday. All precious metals bets are off once this week has ended. Why?……because rising gold is too often associated with bad economic news whereas rising stocks and falling crude are signs the economy has room to recover and avoid recession. So come Friday…..dump your gold (if you have any) and plan on more positive news. For now metals are just short term trades. We will enjoy them while they last.

  2. On September 23, 2015 at 2:40 pm,
    Peter Endres says:

    Just for your information Cory, Brazil have 3 chinese car manufactures.

  3. On September 23, 2015 at 2:47 pm,
    A Listener says:

    If any one of you out there doubts what I am saying I just want to ask you to look at the coming days from another perspective……..Imagine instead that the leader of the worlds second largest economy (or the first in PPP purchasing power) gives an important address to the UN Assembly and stock markets in his country crash on the same day.

    Does that make sense to anyone here?

    Well it better not. And now you might just understand what the urgency was about in halting the declines in Asian markets ahead of this date and why the indices in China have reached an important bottom (timed for the President to speak).

    Bad news is not on the agenda September 28th. Not for stocks anyway.

    We may even hear of new interventions, economic supports and progress on trade agreements that will boost markets while making mincemeat and shredded bacon of the stock market bears.

    Bull Monday.

    • On September 23, 2015 at 11:46 pm,
      Bob UK says:

      What if he talks about the South China Sea and China seeing it as their property – that would cause a ‘war’ panic and you could see the opposite of what you think. Gold could soar and conventional stocks tank.

      • On September 24, 2015 at 3:46 am,
        A Listener says:

        Highly improbable, Bob. The leader of the worlds other major economy is not coming to Washington to sabre rattle and make threats. When have you ever heard of that happening?

        While the media may play up cyber security issues with their audience you had best ignore all of that. Behind the scenes it is actually a good news story so we cannot afford to be distracted.

        I fully expect the tone to be conciliatory with statements made around joint cooperation in support of global trade and growth. It will be billed as a positive event. Nobody is going to lose face.

        Instead of feeling downbeat about the day Bob, you might prefer to look for the kinds of trading setups that will materialize. For example (as I already mentioned in an earlier post) we should not anticipate oil to rise that day.

        Rising oil prices signal recession to the market. Despite all the words spilled on this topic about how companies and earnings are suffering, at the end of the day it is more worrisome that too sharp a rally in energy would send the wrong message.

        So crude is a sell for most of next week and I think the charts support that assertion.

        Expect copper to rise though. This is may be one of the very best trade set-ups because of coppers key position in signalling economic strength and growth. This is all about image and symbolism. If copper were to fall during Xi’s visit I would be SHOCKED!

        Chinese traders will be aggressive buyers during Xi’s visit. We won’t be disappointed.

        If you doubt me though then go and pull up a two year chart of JJC…….it is within cents of hitting an important bottom and should bounce strongly next week. First, we will see it decline to support though in the next day or two….just 10 cents ought to be enough.

        OK…..so why is that important?….I did after all say it mattered. Well after looking at JJC I suggest you check in on the copper futures for additional insight. I will post that chart below. The monthly tells a story worth talking about….

        Draw a line across the bottom of the chart at its three major low points, the last of which is where we sit today. This chart may actually be signaling the end of the multi-year copper declines and that picture tells us the upside is both inflationary while also suggesting expansion lies ahead (whether you believe that or not).

        I can add much more to this post later if you are interested. All that is important now though is that it is my very strong belief copper will take off on Monday…..that both Chinese and US equities will rise off bottoms and that oil will decline.

        Earlier I had written gold would fall. I may have to reverse that comment. Rising gold also signals inflation to the market and given the Chinese have been such major buyers it is probably more likely it will rise (so I will eat my words on that one).

        And rising inflation speaks directly to rising interest rates. This is all tied together.

        If I am wrong about these ideas I am going to have my arse handed me on a platter next week. Funny enough….I am not worried in the slightest. I am not going to be wrong.

        Monthly chart of Copper Futures — 20 Year chart — FINVIZ.com
        http://finviz.com/futures_charts.ashx?t=HG&p=m1

        • On September 24, 2015 at 7:50 am,
          bb says:

          Great post Listener, when you asked what Xi meant I came up with “He wants peace and to do business” lol
          And you could very well be right on copper, the railine is going to get built, they gonna need copper, as well as alot of commodities of course.
          I know I mention it too much but thats a huge deal, when that begins its a commodities bull. Nobody is talking about it anymore, I think the affect is underestimate, maybe attentions spans are short lol

          • On September 24, 2015 at 8:59 am,
            A Listener says:

            What is interesting too me bb is how the chart tells us even before we have the news to make the connections. Copper is lined up to bounce in any case even before Xi has said a word. I am getting long. This is a pretty important date and it is no less significant than the whole country waiting on the latest comments out of the Fed. I think traders would be wise to not downplay the significance of this particular state visit.

          • On September 24, 2015 at 6:22 pm,
            bb says:

            zerohedge/silverdoc? Mentioned China sending military aid to Syria.

            If thats the case there could be more than 1 interesting conversation going on.

  4. On September 23, 2015 at 3:22 pm,
    A Listener says:

    Canadian dollar just hit .7500…..get ready for the bounce.

    • On September 23, 2015 at 8:10 pm,
      original jj says:

      Japan’s CPI data could really stir up the currency markets Thurs if inflation comes in weak

      • On September 24, 2015 at 4:08 am,
        A Listener says:

        Agree….watch that pennant on the futures chart because it is almost completed.

  5. On September 23, 2015 at 11:27 pm,
    Excelsior says:

    This was a particularly good market wrap from Christ Temple & Cory today.

    Great discussion and macro overview of the markets.

    • On September 23, 2015 at 11:47 pm,
      Bob UK says:

      He’s not the messiah. I should know, I’ve followed enough of them!

      (Monty Python).

      • On September 24, 2015 at 12:01 pm,
        Excelsior says:

        funny Bob UK.

  6. On September 23, 2015 at 11:27 pm,
    Excelsior says:

    Chris Temple. (sorry got a little trigger happy with the T button. No offense intended).

  7. On September 24, 2015 at 4:13 am,
    A Listener says:

    Gold is on the move today. Now lets see if it will exceed Ricks 1141 target and closes higher on the day. If so it will have a green light to march higher. That would probably be a happy thing and would fit my narrative that commodities will rise as President Xi speaks next Monday.

  8. On September 24, 2015 at 6:20 am,
    Frank from moscow CCF says:

    CAT…….to FIRE up to…….10,000 ……zerohedge……(paste and post by others)

  9. On September 24, 2015 at 6:23 am,
    Frank from moscow CCF says:

    VW fires pres., get $32million bonus money for leaving. Killers should be so lucky.

  10. On September 24, 2015 at 6:26 am,
    Frank from moscow CCF says:

    WARREN POLLOCK at usawatchdog…………..HUNKER DOWN is his message.

  11. On September 24, 2015 at 7:20 am,
    original jj says:

    Yen is boosting gold, the key resistance level for yen is 118.60/84.32 that’s been a ceiling for awhile. Gold has a chance of breaking above the resistance trend off the Jan highs if it can close above $1150 today as first resistance at $1141 has been left behind so far, imagine $yen moving gold, lol

    http://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=0&mn=9&dy=0&id=p55542232944&listNum=1&a=425261688

  12. On September 24, 2015 at 7:25 am,
    Frank from moscow CCF says:

    OFF TO THE RACES………..GOLD 1155…….hidden dog leg twitch reversal..

    • On September 24, 2015 at 7:32 am,
      original jj says:

      frank your a blank but that did make me smile, +1

      • On September 24, 2015 at 8:24 am,
        Frank from moscow CCF says:

        thanks……..always like to make someone smile in this troubling times…… cheers.

        • On September 24, 2015 at 8:35 am,
          Frank from moscow CCF says:

          this to these…….

  13. On September 24, 2015 at 7:29 am,
    lawrence says:

    Gold in Canadian dollar term is $1540 and silver is $20.4. It is a lot higher than the low of ~1250 and ~18. I am happy with buying gold but the mining equity is quite disappointing.

    • On September 24, 2015 at 7:34 am,
      original jj says:

      this is a pure currency reaction/trade off yen boosting gold, the miners are turning positive but equities in general are a drag on paper

      • On September 24, 2015 at 7:41 am,
        lawrence says:

        JJ, eventually gold will be a currency trade since it is the king of money. So in a long run gold have to rise a lot like Martin has stated but it may not be day to day or even year to year. So the best approach is to buy gold when the price low and lighten up when the price is high. At same time, always keep some just for insurance. Not sure you agree or not but this is my strategy even though it is hard to stick with due to the wild price movement but I try.

        BTW, there are many currencies so other countries may not feel the same as US dollar holders.

  14. On September 24, 2015 at 7:44 am,
    Matthew says:

    Silver reversed where it was supposed to (arrow).
    Today’s action will show on the following chart this evening:
    http://schrts.co/G6PM6y

    • On September 24, 2015 at 7:49 am,
      lawrence says:
      • On September 24, 2015 at 7:53 am,
        Matthew says:

        Not yet, thanks.

    • On September 24, 2015 at 12:04 pm,
      Excelsior says:

      nice bounce of the trend line and fork.

  15. On September 24, 2015 at 7:54 am,
    original jj says:

    Silver first resistance is at $14.95 that’s a key close it must overtake before the next level is in its sights at $15.55+ the major resistance area for 2015 comes in way up at $16.80

    http://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=0&mn=9&dy=0&id=p74395998355&listNum=1&a=425266377

  16. On September 24, 2015 at 7:56 am,
    Matthew says:

    S&P 500 down 1.5%; GDX up 5.5%… hmm, who was the smug guy earlier this week that was laughing at the idea that the two would move in opposite directions?

    • On September 24, 2015 at 8:16 am,
      original jj says:

      It took a move in yen to create an S&P sell off miner pop off a strong gold move as yen almost trades a full cent in the last 24hrs, if yen had not moved the trade would have continued sell everything that we the correct trade was to remove long the miners but not go short as yen did not confirm a short gold trade as again yen was the leading indicator, nothing else