It All Starts Tomorrow

Monday, 16 July 2018
Melbourne, Australia
By Bernd Struben

Can you keep a secret?

How about five of them?

It can be hard keeping your lips sealed. Especially when you know something valuable that few others are aware of.

This rather happy dilemma is something quant trading legend Jason McIntosh deals with on a daily basis.

His proven trading systems are highly proprietary. And the algorithms he spent years perfecting for his trading service, Quant Trader, aren’t something he’s going to share with anyone. Not even your editor.

But that’s not to say Jason doesn’t feel the very human urge to share some of his top stock trading secrets. And this week he’s given in to that urge.

Starting tomorrow, Tuesday 17 July, Jason McIntosh is hosting a seven-day online training seminar. Over the course of the week he’ll share his top five secret tactics for trading like a pro.

These are the same tactics that helped Jason make millions of dollars in trading profits…and helped save him as much or more in avoided losses. In fact, these trade secrets saw him bag so much cash he retired from professional trading at the enviable age of 37.

One of these secrets takes aim at a highly popular trading rule. You’ll likely already be familiar with this one. But you’ll be surprised by Jason’s explanation of why you must break this rule to improve your odds of success.

The seven-day seminar, appropriately titled ‘Trade Secrets’, is available at no cost to our paying subscribers…like you. Whether you’re an experienced trader or just starting, you won’t want to miss out as Jason lifts the lid on some of his most successful trading methods.

As with Port Phillip Publishing’s other complimentary seminars, all you need to do to gain access is register your interest. You can sign up to learn Jason’s trade secrets, for free, here.

It all starts tomorrow.

Now a look at the markets.

Markets

Over the weekend the Dow Jones Industrial Average closed up 94.52 points, or 0.38%.

The S&P 500 gained 3.02 points, or 0.11%.

In Europe the Euro Stoxx 50 index finished up 9.05 points, or 0.26%. Meanwhile, the FTSE 100 gained 0.14%, and Germany’s DAX rose 47.76 points, or 0.38%.

In Asian markets, Japan’s Nikkei 225 is closed for the Marine Day holiday. China’s CSI 300 is down 0.55%.

In Australia, the S&P/ASX 200 is down 29.79 points, or 0.48%.

On the commodities markets, West Texas Intermediate crude oil is US$70.72 per barrel. Brent crude is US$75.03 per barrel.

That puts WTI down 4.3% since I last wrote to you on Wednesday, 11 July. Oil could still nudge higher in the short term. But the bull market that saw black gold hit three-year highs in June looks to be at an end.

(More on oil below…)

Turning to gold, the yellow metal is trading for US$1,242.72 (AU$1,673.47) per troy ounce. Silver is US$15.83 (AU$21.32) per troy ounce.

One bitcoin is worth US$6,350.70.

The Aussie dollar is worth 74.26 US cents.

Betting against the house

As noted above, West Texas Intermediate crude oil is down 4.3% over the past five trading days.

But in case you’re thinking about taking a punt in the other direction — on rising oil prices — don’t forget you’re betting against the most powerful man on the planet.

Yep. Like it or not, that’s Donald Trump.

Trump remains intent on bringing down the cost of petrol for US consumers before the 6 November mid-term elections. That’s despite knocking as much as half of Iran’s oil exports off the market when renewed US sanctions kick in on 4 November.

After pushing OPEC into moderate production increases, Trump is now eyeing the US’ own strategic oil reserves…the largest in the world. And in bad news for oil bulls, the news came right as Libya’s state oil producer reopened a major oil field far sooner than expected.

From Bloomberg:

Oil had its worst week since late May as the U.S. considered tapping national crude reserves to quell rallying gasoline prices amid a restoration of key Libyan supplies that may throw worldwide supply and demand out of whack.

Futures sank 3.8 percent this week in New York. The Trump administration may draw on the 660 million-barrel Strategic Petroleum Reserve to increase domestic supplies, according to two people familiar with the situation.

Meanwhile, Libya’s state oil producer restarted output from a major field that had been shut for months.

You can see oil’s latest retreat circled below:

Trade War Risk


Source: Bloomberg
[Click to enlarge]

As the title of the graph indicates, oil is facing another headwind. This one is in the form of Trump’s trade war threats. Falling global trade levels and slowing national economic growth would both see demand for oil fall.

While I expect Trump will resolve most of the current trade disputes before the November elections, investor uncertainty should hasten another 10–15% decline in crude prices before the end of northern summer.

And we haven’t even factored in the extra Russian oil I expect Putin is offering Trump in their face to face meeting, even as you read this…

The $70 billion ‘cash squeeze’

Got a spare $70 billion? Australia’s banks want to hear from you.

We looked at the impact rising US interest rates are likely to have Down Under last week. To many readers’ surprise, the RBA’s decision to maintain the official cash rate at its current record low 1.5% doesn’t entirely insulate Aussie banks from higher funding costs.

Add in Australia’s cash strapped households and you have all the ingredients you need for a funding shortfall.

From The Australian Financial Review (AFR):

Australia’s banks will be forced to find an additional $70 billion of funding as superannuation funds shift out of cash into international assets while indebted households draw down on their savings.

The widening of the so-called “funding gap”, which measures the difference between bank loans and deposits, comes amid a crisis-like blowout in short-term funding that is increasing bank funding costs and has already prompted the non-major banks to enact “out-of-cycle” mortgage rate rises…

The rising financing demands may further increase funding cost pressures, initially triggered by a spike in United States short-term interest rates.

In a separate article, the AFR notes that AMP, Bank of Queensland, IMB and Auswide, Suncorp, ME Bank, Pepper Group and Macquarie have all lifted their variable mortgage rates out of cycle with the RBA.

Macquarie – which accounts for about 2 per cent of the nation’s mortgage market – will raise owner occupied variable rates for those paying principal and interest by six basis points. Those paying only interest will have their rate upped by 10 basis points as will variable rate loans for investment and self managed super funds.

A basis point, if you’re not familiar with the term, is simply 0.01%. Meaning 10 basis points only represents a 0.10% rise for customers with variable rate loans…for now.

The Big Four banks have yet to follow suit. But if they want to maintain their profit margins — which they certainly do — the next bump in mortgage rates you read about may well come from NAB, CBA, Westpac or ANZ.

And while .10% may not sound like much — because, well, it isn’t — it could be enough to push many of Australia’s over leveraged homeowners over the edge.

In fact, Digital Finance Analytics principle Martin North forecasts that a rate rise of just 0.15% from the big banks could see one million Aussie households potentially default on their mortgages.

From ABC News:

Up to 1 million Australian households could be at risk of mortgage default by September.

That is the warning from one independent analyst if the big four banks do what many fear they will do and increase their standard variable rates rise by as little as 0.15 percentage points over the next few months.

“I’m almost certain they’ll be forced to lift those rates, it’s a question of timing, and of course the political reaction when it happens,” Digital Finance Analytics principle Martin North said.’

Now Martin’s prediction is just that. A prediction. But the fact he’s cautioning of one million possible mortgage defaults from a rate rise of only 0.15% should tell you something.

When inflation finally kicks in — which it will — and rates start to well and truly go up by 1–2% or more, Australia’s massively indebted households will be in trouble. Big trouble.

That could see us look back and recall the current mild retreat in housing prices fondly.

These warning signs are not lost on US economist and forecaster, Harry S Dent.

In his new best selling book, Zero Hour, Harry predicts that Aussie house prices won’t just correct…they’ll crash by 50%. All in the next two years.

If that sounds hyperbolic you’ll want to read Zero Hour. Harry explains how he expects it all to unfold, step by step. It’s a compelling read.

You can secure your discounted copy — and get more details of what’s on offer — here.

Finally, here’s the latest on the Trump-Russia-Deep State saga from The Australian Tribune:

‘How Much Did Obama Know About Russian Meddling?’

It’s not just US Democrats lambasting US President Donald Trump over Russian agents’ meddling in the 2016 elections. The mainstream media around the globe are eager to paint Trump as a Russian lackey. And to tie him directly to Russia’s illicit activities.

But they miss a critical point. One that Trump himself raised on…you guessed it…Twitter.

Trump has questioned why…

If you’re fed up with sanitised, politically correct dogma cut and pasted from one mainstream source to another then The Australian Tribune is for you.

And it’s absolutely free.

Sign up here to get The Australian Tribune delivered free to your inbox five days per week.

You can visit our website at https://www.theaustraliantribune.com.au/ to read the complete article above now.

Cheers,

Bernd