Death threats from the White House…markets rise

Tuesday, 26 March 2019
Adelaide, Australia
By Bernd Struben

  • Loose money…angry presidents
  • ‘Daley Bows Out as Berejiklian Wins a Majority’

I am more interested in how markets change direction than in what particular direction they are going in. Wave structure is very important, and it is a combination of the knowledge of wave structure and how markets change direction that gives me my edge.’

Veteran stock trader, Murray Dawes

The markets have changed direction…again.

On Friday US and European markets sold off heavily. As is their wont, Aussie and Asian stocks followed suit on Monday.

The ASX 200 closed down 1.1% for the day, seeing $20.1 billion evaporate.

Yesterday (overnight Aussie time) investors in US equities did a retake.

After losing 1.77% on Friday, the Dow Jones eked out a 0.06% gain on Monday. At time of writing, the ASX is again gamely following the US market’s lead. This time to the upside.

In a sign the latest market slide could be short lived, futures traders are pricing in a 0.33% gain for the Dow Jones on Tuesday; that’s tonight for us. Which could make for another round of positive trading here tomorrow.

If you’re a long-term buy-and-hold investor, these daily and weekly swings are best ignored. Your portfolio of blue chip stocks may lose 5–10% of its value one month. But barring a major market crash you should recoup those losses over the following months and eventually return to profit.

That’s the idea, anyhow.

For active stock traders, on the other hand, this kind of market volatility can offer up the potential for some rapid gains. Or losses, if you get the direction wrong.

With the right edge you have the potential to turn those rapid gains into big rapid gains.

I’m sure you’ll agree that while rapid gains are good, big rapid gains are great.

Yet to make those big gains from fast moving changes in stocks, indices or even currencies, you need an advantage over the host of other traders trying to do the same thing.

Moving averages are one of the more common and simple tools used to gauge markets. For example, when the 50-day moving average moves higher than the 200-day moving average, it’s taken as a bullish signal. Meaning the price is predicted to go higher.

But Alpha Wave Trader’s Murray Dawes says these won’t give you any advantage over the masses:

Using moving averages or RSIs and MACDs, when every man and his dog looks at them, is a recipe for disaster. Lagging indicators are just that: lagging. They have little hope of giving you an edge in markets that move so fast.

Instead of relying on lagging indicators, Murray wants to know precisely when momentum in a particular stock, currency or across an entire index is changing:

Buy and sell pivots give you a clear, non-lagging definition of when momentum is shifting. The beauty of using this method to help you make decisions about equity exposure is that we get a signal very quickly to enter and exit the long-term hedge.

If this sounds a little technical to you, don’t worry. It did to me as well.

But Murray explains it all in terms that any experienced investor can wrap their brain around.

And there’s nothing complicated about the ‘slingshot trades’ Murray fires off to subscribers of Alpha Wave Trader every time his signals flash.

The doors to new members of Alpha Wave Trader opened yesterday for the first time this year. Those doors close again on Friday.

While they’re open, you can find out precisely what’s on offer here.

Now to the markets…


Overnight, the Dow Jones Industrial Average closed up 14.51 points, or 0.06%.

The S&P 500 lost 2.35 points, or 0.08%.

In Europe, the Euro Stoxx 50 index finished down 5.25 points, or 0.16%. Meanwhile, the FTSE 100 lost 0.42%, and Germany’s DAX closed down 17.52 points, or 0.15%.

In Asian markets Japan’s Nikkei 225 is up 426.11 points, or 2.03%. China’s CSI 300 is down 0.59%.

In Australia, the S&P/ASX 200 is up 7.29 points, or 0.12%.

On the commodities markets, West Texas Intermediate crude oil is US$59.22 per barrel. Brent crude is US$67.40 per barrel.  

Turning to gold, the yellow metal is trading for US$1,322.33 (AU$1,857.73) per troy ounce. Silver is US$15.55 (AU$21.85) per troy ounce.

One bitcoin is worth US$3,919.30.

The Aussie dollar is worth 71.18 US cents.

Loose money…angry presidents

We talked about ways to gauge, and potentially profit from market shifts above.

But why did markets, all across the globe, change direction in the first place?

Some of it can be attributed to bargain hunters. They tend to come out of the woodwork following any steep falls. But that’s only a small part of the bounce here.

Investors are also still balancing news of slowing global growth and trade with reports that central banks the world over are unlikely to tighten monetary policies this year. In fact, most are leaning towards easing policies. Which, as you know, is good news for stocks.

The Reserve Bank of Australia (RBA) almost certainly won’t raise rates from the current record low 1.5% this year. If anything, we could be looking at one or two rate cuts, bringing the cash rate down to 1.0% before ringing in 2020.

Much more importantly, at least on a global scale, is what the US Fed is doing. And it’s moved away from signalling significant fiscal tightening to a return to easy money.

As Bloomberg reports, Chicago Fed President Charles Evans said, ‘The Fed may have to put rate hikes on hold or even ease monetary policy if economic forecasts for 2019 disappoint.’

That’s the classic ‘bad news is good news’ for stocks scenario. One that often sees markets fall on good economic forecasts and rise when they disappoint.

All these factors…and others…have worked to reverse the sharp slide for the moment. But I believe the biggest boost came from Donald Trump’s exoneration in the Mueller fiasco investigation.

As I wrote in yesterday’s Port Phillip Insider, ‘I expected markets would bounce on the news that this particular witch hunt is all but over.

Judging by the futures market and action in the Aussie and Asian markets right now, that looks to be playing out.

Investors across the world, we then speculate, held pent-up concerns about the financial ramifications of Trump facing impeachment proceedings. Concerns which don’t appear to extend to certain far left US politicians and media moguls who may find themselves on the wrong end of a firing squad.

That may sound parabolic. But tensions are running high in US politics…death penalty high.

White House spokesperson Sarah Sanders appeared on NBC’s Today show yesterday. She held no punches discussing the next steps following Mueller’s conclusion that Trump was innocent of the spurious claims of collusion with Russia.

The media and Democrats have called the president an agent of a foreign government. That is an action equal to treason, which is punishable by death in this country.’

As Reuters reports, she singled out a few top level men who may find that even their connections to the Deep State won’t save them this time around.

Sanders, in remarks to reporters, also urged congressional hearings to investigate a number of prominent Trump critics including former US Director of National Intelligence James Clapper, former CIA Director John Brennan, former FBI Director James Comey and other FBI figures.’

Speaking at the White House, Trump didn’t name his antagonists. But he made it clear he knows who’s to blame. And he’s coming after them: 

There are a lot of people out there that have done some very, very evil things, very bad things, I would say treasonous things against our country… Those people will certainly be looked at. I’ve been looking at them for a long time.’

Sometimes it’s nice to be noticed.

Other times…not so much.

Finally, here’s the latest in politics from The Australian Tribune:

‘Daley Bows Out as Berejiklian Wins a Majority’

New South Wales Labor leader Michael Daley isn’t having the best week of his life.

The video of Daley saying Asians with PhDs were taking local jobs came to light just days before the election. And it hurt. Daley suffered a 10% fall in his primary vote.

Now, with his colleagues having sent the clock is ticking…

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.

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