Friday, September 9, 2016

Hawkish and Dovish members in the FED

World Markets sell-off

Day of very strong falls in Europe and the US, with the SPX less than 2% for the first time in several months and the VIX shot 32%.. And this is due to the reaction of the European markets to the declared inaction of the ECB, which sink stocks and bonds, the latter very dangerous (read: there is a bubble there that can explode). This had a strong impact on the US today, where the FED also continues its war of statements about the rise in rates, some in favor of doing so, because leaving it is risky (Rosengren), and others against it until get inflation (Tarrullo), and the worst , they declare it in the same day! On Monday another representative (Brainard, an upward opponent) will speak to continue to create discord. The ideal is to see the panorama from a far, or to make swing trading with immediate profit-taking. At least until September 21 ...

The Dollar is very strong against all currencies, after a probably Rate Hike.

British Stocks $EWU rising 

Last week, opening this blog to the world, I commented that the Brexit seemed a good investment opportunity. A week later, supported by the good English PMI of yesterday (53.3 over an expected of 49, entering the expansion field), the rise of the english etf of stocks EWU is confirmed, today + 2% with good volume. The opportunities are there, you have to be attentive nothing more ...

A week ago, with the stock at 15.60, I detected this clear
 bull-divergence in EWU: today + 2%.

Apple $AAPL falling in news

What I speculated a few days ago: AAPL no longer impresses anyone, a last smartphone without anything new originates two days of heavy falls. To this is added the Irish claim, the rejection in China to the new iphone7, a new issue of debt (for a company with so much cash, apparent), something is not right there ...

 For its 'luck' its main competitor, Samsung is in trouble for the explosions in the batteries of its Galaxy Note7 in some countries. They were few but there they are, and forced the Korean giant to replace models worldwide without cost. And today the US prohibits its use on all commercial flights: its stock falls 4% on the Korean stock exchange.

Apple close to breaking the SMA50. Notice the fall in positive feeling.

A Hawk and a Dove

A preamble: a hawk, in monetary policy, is generally in favor of higher interest rates. He believes that inflation is already high and he needs to adjust the monetary policy to avoid it, even at the expense of unemployment, and thus maintain stable prices. A dove is quite the opposite: it prefers to maintain or reduce rates because it fears the high rate of unemployment and does not believe that the current inflation rate is high enough to worry about. Conservative and liberal, right and left, republican and democrat, all is the same...

Well today followed the statements, hawkish vs dovish: early Neel Kashkin, official of the FED of Minneapolis, contradicting a dovish Rosengren and stating that there is no urgency to raise rates. Lockhart (is neutral), from Atlanta, has preferred not to take sides and only talks about 'serious discussions' within the FED. The market took the upward direction when at noon the dovish Brianard, the last statement allowed before the FOMC meeting next week, called for caution in the issue, i.e a tacit message of No to the rise in rates. That a dovish says to be in favor of the Rate Hike is what the market fears, and that happened with Rosenberg, on Friday. Consequence: sell off in Wall Street, dragging almost all the stock markets of the world ... so the market is sensitive, a simple statement moves everything!  This link will help identify the actors of these days, the FED members.

Finally, JP Morgan banker Dimon, appears and say that sooner or later Rate Hike will be given ... what a novelty, no? But every time they weigh less declarations of members of the private bank because its interest in influencing in the subject is obvious ... the SPX today hovering + 1.5%.

So is the panorama today among the members of the FED (Source: CNBC)

September: usually most bearish month for the S&P500 $SPX

As I mentioned in a previous post, September is usually a bear month, and this year before elections in the US, it can be more. You have to be careful this month. This graph of the SPX is very illustrative: in September and October of an electoral year the variations are more marked.

May and September are usually months of falls. (Ref: