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Past edition of the "What Ian Can See" WICS trading information newsletter.

Ian's weekly look at the world economic situation and his world view. Members get access to the current edition, archives, chart analysis and one-to-one mentoring on your trading.

October 4th 2020

Hello again folks, and welcome to October! It's going to be an "interesting" time in the markets methinks - or at least I hope it is because these past many months have been composed of one big yawn as far as trading is concerned. I suspect that now however things are going to heat up a bit, partly for "seasonal" reasons (volatility/pessimism tend to increase once the Equinox has passed behind us and the days become shorter and shorter) and partly for "uncertainty" reasons as the Yank election approaches and the Orange One is in hospital with the lurgy. Just let me be clear - I wish him no ill whatsoever and I hope he makes a full recovery. My interest in the eventual outcome of the Yank election is purely a financial one, just as it was last time. I don't even wish ill on Scotland's Evil Dictatorette, nor on Bornarse in Downing Street - not physical ill anyway, just career ill, hopefully terminal and as soon as possible. I amaze myself as to how nice I am at heart. Honest.

Anyway, apart from a link or two below, there will be no more lurgy mention today, you may be pleased to hear. In so saying, if Bill Gates thinks I'll be getting vaccinated at any stage, he can think again because that is never going to happen.

Onward then to matters financial, and apart from the fact that markets are still not crashing, things are proceeding pretty much according to the script that pretty much always applies towards the end point of massive bear market rallies. You're aware of course (if you read these ramblings regularly and shame on you if you don't....) that "small options traders" - those trading fewer than ten contracts at a time - are buying call options like there was no tomorrow, and that trend continues to grow. These are people who are taking short term positions betting that prices are going to keep on rising, and 'tis a market rule that they will be most exposed immediately before the crash that bankrupts them. Likewise, somewhat bigger traders are also buying call options like there was no tomorrow, according to Bloomberg. Seemingly, traders who deal in fifty contracts or fewer at a time, are hugely committed to the buy side. Bloomberg has produced figures for September that show "call to open" options buys are much greater than "put to open" buys. 1.6% of the entire market capitalisation of the S&P 500 is a pretty big number when applied to the purchase of call options, and beats the previous record (1%) made in March 2000.

Meanwhile the IPO market is going bananas, with new issues abounding. The Wall St Journal tells us that Special Purpose Acquisition Companies (SPACs) are attracting vast sums, supplied by idiots, obviously. Would you really, really "invest" in a company that has no business and no business plan either, but one day it might have, honest injun?

There can be no doubt at all that we're at the height of a mania and I can absolutely guarantee it's going to end in tears for an awful lot of people. Indeed we're seeing the beginning of the end - these stock market "outages" like in Tokyo the other day, are highly suspicious by my way of thinking. I suspect they're a way of hiding a lack of liquidity........ Time will tell!

Elsewhere, job losses continue of course. Shell is dumping another 9000, which is mere chickenfeed compared to Walt Disney's 28000. In Blighty, Capital Economics (a consultancy) suggests that we'll be seeing "another million redundancies" over the coming months. I don't doubt it - how can businesses plan anything else in the face of this government's total and complete uselessness on every level? (And of course I include the Scottish police state when I say that.)

Nowhere is exempt from this total mess of course - even Scandinavia, despite that region's relative recovery from the panic-demic. They need to export stuff and there just aren't the buyers.

Meanwhile, Germany's consumer prices fell 0.2% year on year in September. That's the biggest drop in five years and it adds weight to the IW thesis that deflation is the Next Big Thing.

I note too that everyone seems to be delighted that Asda's ownership has returned to Blighty after the Walmart fiasco years. Hmmm, with an extra £4bn of borrowing on the balance sheet? We'll see how that pans out then.

Coming back for a moment to "useless" as mentioned above, here's a piece that may be worth a read:

https://www.telegraph.co.uk/
The loonies certainly are pretending to run the asylum these days, eh?

OK - enough nonsense for this weekend then!

Onward to a list of bits and pieces you might consider worth reading (or not - whatever floats your boat), followed by a few charts as usual.

First, the links:
https://www.telegraph.co.uk/ - The three taboos at the heart of Johnson's coronavirus fiasco

and
https://uk.reuters.com/ - England's COVID-19 app does not accept a third of test results

then
https://21stcenturywire.com/ - Denmark Heads to Pre-COVID Normality

followed by (this one is an absolute "must read"!)
https://www.telegraph.co.uk - I got locked out of Twitter for having the 'wrong' opinion on Covid

Finally
https://morningporridge.com/ - Losing the Plot

There we go then folks - onward now to some charts and first today there's a look at Greggs, where there are conflicting signals but in saying that, clear enough prices - either a drop out of horizontal support or a push back up from a falling wedge. You pays your money.......Next, "horizontal support and resistance" is the theme on the Ocado chart. Then there's an update for the Aviva countertrend channel last discussed here on September 6th. Finally, there's some (short term) horizontal support and resistance to be seen on the Dow Jones (DJIA) picture.

here's also a slightly "bigger picture" countertrend channel and the resistance I mention represents a probe and retrace thereof. Which might mean what?

That's all for this weekend then folks. It's raining hard here so I live in hope that my salmon beat might see enough water to permit some fishing tomorrow - here's hoping!

I know I said I wouldn't mention the lurgy again today, but I can't resist changing the title of that old cowboy ditty from "We're heading for the last roundup" to "We're heading for the next lockdown" - here in Scotland at least. Let's just hope fishing ain't banned this time!

Anyway, all the best till next weekend.
Ian.

The rest of this post, which is the charts and analysis, is available to TTIWW course members only. Members receive the latest post, the archives, plus the manuals, video updates and one-to-one mentoring from Ian Williams via email.

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'IMPORTANT NOTICE: This information is for EDUCATIONAL PURPOSES ONLY. It represents only MY understanding of what is happening in the market for any particular share, stock, commodity or index. In NO circumstances should it be construed as recommendations to trade. If I choose to trade what I see, that is MY decision. YOU must, in turn, come to YOUR OWN conclusions about what action, if any, YOU might choose to take'.

 

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