Rest assured, I am still recording all the markets during the day, and keeping a close eye on news flow.
I had high hopes for a video today. There seemed to be a constant flow of news regarding Putin, and also some words from Yellen. But after watching the tapes back, the market response was very lagged – basically a far cry from the sort of high-impact news Captain Harry Hindsight dreams about.
Today was a load of nonsense, as far as I’m concerned (as at 7pm UK time anyway).
Up, Down, Back to Square One
I like to keep an eye on SEC filings. Every now and then I come across a funny one.
Filed 1 hour ago (as of this post), by AMERICAN GRAPHITE TECHNOLOGIES INC. [AGIN]
Not a good sign for any affiliated companies!
Current stock value:
Not in good shape anyway
Before you ask, yes, it is possible to short this stock (at least at the moment, in quantity of 30k shares)
As a general rule I don’t pay much mind to data releases. In an age of automated trading, I’m not sure if you’d have better luck at the casino. However, when a major data point misses expectation, as NFP this week did (6.3% unemployment rate vs 6.6% expected), I think it’s worth posting a video.
Obviously it would be nice to see the price ladders in addition to the charts – but screen space is limited.
For my own personal interest, I like to skim through the SEC 8-K filings. Sometimes you come across some pretty revealing submissions.
Where penny stocks are concerned, the media often overlook these entirely. I doubt there are more than a handful of people in the world who have seen what you are about to see:
I’m not suggesting there is a trading opportunity here. Not only have the price of these shares already been on a steady decline towards 0 for many months now, but stocks in small companies can be difficult or impossible to short. However, this is a great illustrative example of how reading SEC filings can turn up some interesting – and eventually profitable – ideas.
Despite my lack of video updates lately, rest assured I have been recording my screen. There just hasn’t been any particular news items worth adding to the Harry Hindsight Highlight Reel.
Instead, seeing as it’s the weekend, I thought it would be nice to take a quick look back at the S&P 500 chart, for the last 5 days, making notes of where news contributed to the market action.
Two things to note:
1) The Twitter Rumours regarding a possible emergency Putin Conference caused an obvious stir – but I watched back the replays, and the information came out in dribs and drabs, as you would expect from a social networking source. This was not a classic “free money trade”, despite how it may appear on the chart…
2) I considered drawing up comments on various other charts such as the EUR, TSYS, Oil etc, but I felt the S&P500 nicely captured any key talking points.
Taking stock of events.
Despite recording all the action from the week, there were no specific harry hindsight news plays that I felt warranted a video clip.
As the blog has progressed, I have become more selective about what qualifies as a potential “free money trade”. There have been a handful of key moments over the last several weeks; I’d like to review the biggest of them on a 60 minute chart, to really put them in context.
What I found quite surprising was the lack of higher time-frame “follow-through” in each instance of news. Draghi or Yellen might say something important and dictate the market direction over the following couple of hours, but the very next day – or soon enough anyway – the market retraces the whole move. It makes me wonder just how significant news is in the grand scheme of things?…
S&P500, looking at key news events of the last several weeks.
EUR:USD, looking at key news events of the last several weeks.
The most likely source of excitement today looked set to be the evening release of FOMC Meeting Minutes. For those who don’t know, every month the US Federal Reserve release a set of notes that provides clues as to what future policy measures they might take).
Federal Reserve Chair Janet Yellen recently said that extraordinary commitment to dramatically lowering US unemployment is still needed and will be for some time – and she says her fellow policy makers at the Fed are in agreement.
FOMC minutes reinforced this Dovish tone, and various markets attracted the attention of buyers….
The focus on Tuesday morning was on the scheduled release of GBP’s Manufacturing Production. Expectations were for a 0.3% monthly increase, although as you can see these expectations don’t have the best track record in terms of accuracy…
Anyway, the actual figure came out as 1.0%; let’s take a look at how the markets -the pound in particular – reacted…
Due to the speed of trading machines, I don’t believe it’s a viable long-term strategy to trade economic numbers, with the rare exception of economic figures that the market finds absolutely shocking. What I found curious about British Manufacturing Production was the steady buying of the Pound that took place in ahead of the data release. Who was so confident that the economic data was going to be good news for the Pound? Or was this just a coincidence?
In some respects it was a boring session. Everyone was waiting for NFP and when it finally arrived it was broadly in-line with expectations.
* NFP: 192K as against 199K consensus
* Unemployment rate: 6.7% as against 6.6% consensus.
But having said that, several markets have spent the remainder of the session trending beautifully.
Personally I prefer to sit on my hands until the market is really caught out (e.g. NFP of 100K, Unemployment of 6.5%), and while I am no Technical Analysis guru, the double top and subsequent break lower by the S&P 500 was a really inviting opportunity.
Anyway, that will do for one week – please come back for the next!
The day many had been waiting for: ECB Statement.
Draghi sits down and begins his report, having already decided to make no changes to lending and deposit rates.
2 minutes in, and 6E has rallied a good 30 points… but tentatively. My view is it may have in part been due to shorts unwinding their bets that Draghi had some hint of something up his sleeve.
This is a special blog post in that the video is a full hour long, containing several major markets as they gyrate, alongside live audio from Draghi’s statement and Q&A session.
Personally I didn’t see any obvious trades to make. Yes, the Euro moved up, and later moved down, but I prefer the trades that are smacking you in the face: “The ECB … admits defeat… Mario is tired… I retire”. That sort of news.