Each day I scan and synthesize market-moving news. I look at macro themes, currency moves and global economic indicators that support or challenge my thinking on the Big Picture and help me take the mood of the market. I like to assemble these data points so I can turn them into operational trade ideas for my clients in my Live Trading Room. Some may even make it into my Brokerage-Triggered, Trade Alerts!

You are getting this Free Bait (Daily Market Thoughts) as part of LaDucTrading’s Free Fishing Lessons! Take the next step: Come Fish With Me.


Market Thoughts

Big deficits and looser monetary policy are negative USD, but as long as Currency-hedged US Treasury Yields remain negative then the USD is not weakened significantly. And that is in part why ECB, BOJ et al keep doing it – keep range-bound USD in good shape for stocks. Higher USD is emerging market contagion and will would cause the global economy much distress, especially in its fragile global state, actually causing a recession not just talking about one.

So even though Trump would be delighted with a Dollar Debasement strategy, and while it may temporarily add fuel for higher U.S. market prices, it can destabilize foreign currencies that are supposed to be ‘controlled’… like the Yen. And a Yen in escape velocity mode is not Bullish equities. And what about the Chinese having this kind of dollar appreciation take place? The collateral damage is a higher Yuan on top of Tariffs? Oh my. The country is already 300% Debt:GDP. The monetary stimulus they are enacting combined with capital flight containment efforts on top of higher borrowing/repayment costs from higher USD would be all together… Wealth Destroying.

So in the case of Central  Banks printing, to avoid inflation (but not too much) and buoy the USD (but not too much), it seems the balancing act of keeping the USD in balance at all costs, is a great cost to pay.

My Gold short thesis hasn’t confirmed yet, but I see signs: TLT looks ready to pull down with Yen and Yuan. Gold usually trades in a correlated fashion with bonds/foreign currencies as USD moves higher. Also, Gold has a tendency to trade down into FOMC, especially if hawkish. It’s not, so maybe Fed really will cut 50 bps.
As for a bond trade, I am expecting TLT/bonds to tag the red trend-line (yellow arrow) at least.


Recently Published Research/Analysis for Clients of LaDucTrading:


BROKERAGE-TRIGGERED TRADE ALERTS!


 

Samantha Says

Market Commentary from Samantha’s Live Trading Room and StockTwits Premium Chat Room

Jul. 29th, 9:25 am PYPL; terrible earnings and now a downgrade to sell. 30 WK in play fora move down to this level at 106.50
Jul. 29th, 9:26 am SBUX; double downgrade this morning. Below 96.50 for possible short. It is loved though, so they may buy the dip. On watch.
Jul. 29th, 9:33 am PYPL; needs to hold 113 or headed to that 30WK at 106.50 ($108.50 1st PT)
Jul. 29th, 9:38 am Pretty quiet out there. May just churn in to FED meeting Wednesday.
Jul. 29th, 9:41 am XLF; big bullish engulfing candle last week, but running up against trendline and pulling back a bit.
Jul. 29th, 9:44 am X; Been looking for higher, but if it breaks 14.84 no good
Jul. 29th, 9:47 am DF; Mentioned as a bottom fishing play last week and now getting some call action and up to 10WK.
Jul. 29th, 9:55 am EFA; largest put buying I’m seeing this morning. Nov 19 65 Puts bought. $1.3M bet
Jul. 29th, 10:08 am Tech breaking down this morning (except AAPL). AMZN, FB, MSFT, SMH & IGV components all down – profit taking.

Wall Street Jane’s Journal

Jane is not only Samantha’s Live Trading Room moderator, she facilitates client engagement and relays Samantha’s trade ideas into the LaDucTrading StockTwits Premium Room. A former banking VP during the GFC, she now trades full-time and actively shares her trading ideas, plan and process.

Trade Idea: $CAT

Last night in the StockTwits room I talked about $CAT, the potential daily cup and handle and other positive technicals.

 

It had a positive day today, closing up 1.16% to 134.46.

Macro Matters

Economic Data

No Data Today.

Tuesday Data on Tap:

  • Personal Income for June
  • Consumer Spending for June
  • Core Inflation for June
  • Case-Shiller Home Price Index for May
  • Consumer Confidence Index for July
  • Pending Home Sale Index for June

 

Trade Wars and More

China Warns Hong Kong Unrest Goes ‘Far Beyond’ Peaceful Protest

China warned that Hong Kong’s unrest had gone “far beyond” peaceful protest, after a chaotic weekend of tear gas and clashes illustrated the government’s struggle to quell a leaderless, unpredictable and widespread movement.

China’s top agency overseeing Hong Kong condemned “evil and criminal acts committed by radical elements” in an unprecedented briefing Monday. While officials reaffirmed support for the city’s government and police force, the decision to address foreign media in Beijing signaled growing concern as eight weeks of unprecedented unrest start to shake business confidence in the former British colony.

Hawaii’s $18 billion tourism industry is the latest victim of the US-China trade fight

A growing cloud of economic anxiety is looming over Hawaii, as the ongoing trade war between the world’s two largest economies threatens to cut off a once-steady flow of Chinese tourists. As of June, Chinese visitor arrivals have dropped by about 36% compared with the same period last year, according to figures provided by the Hawaiian Tourism Authority.

In 2018, nearly 10 million travelers from around the world visited the Aloha State’s sun-soaked islands, generating $18 billion and employing more than 200,000 people. About 20% of those visitors traveled from Asia, with Japan, Korea and China providing the lion’s share.

And while Chinese tourists represent less than 2% of Hawaii’s total visitor count, they stay longer and spend more money compared with other Asian travelers. On average, a Chinese tourist stays a little more than eight days and spends approximately $350 a day when vacationing in Hawaii.

Great Reads

How Poland became a front in the cold war between the U.S. and China: There’s always collateral damage.

An alleged spying case involves a Chinese businessman who speaks Polish and worked for Huawei – the Chinese telecom-gear giant in the crosshairs of the Trump administration. In lengthy remarks, the jailed Chinese suspect tells Reuters he’s an innocent casualty of the campaign against Huawei.



Housekeeping Note

There will be No Daily Fishing Lesson for market action/macro-to-micro thoughts for Tuesday July 30th as WallStreetJane is taking a personal vaca day and Samantha has been focused on three Client Research Reports for this week in addition to a RealVision Interview this afternoon – to be broadcast Thursday – not to mention lots of market action ahead of the FOMC tomorrow. Will be back Wednesday night post Fed!