2022/10/18 (091) Column

„Buy, buy, buy shares
– but with a lot of patience, with a lot of patience, with a lot of patience!“


I have good news for us market guys: the German share is appreciating!
In the summer of 2022, little attention was paid to the general public (no wonder given the mood of inflation and/or crisis) that the federal government presented the cornerstones of a planned “Future Financing Act” months ago. This is intended to make the share more attractive as an investment and financing instrument in Germany for a significantly larger group of people. And make the German financial center, our stock exchange in Frankfurt, more competitive for companies. Very beautiful! It’s good! But why not sooner? We could have used something like this much earlier. But I don’t want to complain! On the contrary!
Basically, very good news for the culture in my home country Germany!
And now, for better or for worse, we may be at the most used word of the year 2022: patience
Therefore, a recipe for success from my side. Always trade 2 depots. A depot where you only ever buy shares; and never want to touch again; Best of all until retirement age. And then open a second one where you trade CFD derivatives. With an online broker of your choice. Of course you have also to read my daily DEVISE 2 DAY Affiliate Financial Market Online Newspaper and also implement my Technical Analysis 4XsetUps. And if one day you change your mind, then don’t. Also realize options for other information providers. All that matters to me is do this regularly. And every day for a month! Why? Therefore: within a month there are 22 to 23 trading days. Start with 0 – i.e. a portfolio value, without an open camouflage action. And realize a 1% opportunity to trade every day if you are conservative. With 2% if you are set a little more dynamically. And with each 3% I already call my speculative readers. So that after one month you have a maximum of 66%, 44% or even 22% of your dept value in the market! That should be enough in this wild, unpredictable US stock market in the second half of 2002. And bring a lot of patience, a lot of patience, a lot of patience with you! And that regardless of whether you reach your target prices when your transactions are stopped out – or not. Because it is still worth trading shares (buy/sell or do nothing). Especially in the form of CFD`s. And that even if the headwind, in this year 2022, has increased noticeably…
DEVISE 2 DAY 48h
– My Last Thoughts About Market Price Actions

In the US, the week will be dominated by earnings reports, speeches by several Fed officials, and housing data. Investors will be also monitoring financial markets in the UK following the government U-turn on tax cuts. In China, the 20th National Congress of the Chinese Communist Party will take place and Q3 GDP growth, alongside industrial production and retail sales will be released. Also, inflation rate data is due for the UK, Japan, Canada, and New Zealand.

Nothing is to be expected from the major central banks this week – no regular meetings are scheduled for this week. Nevertheless, the focus should definitely remain on the 10-year yield on a case-by-case basis; from currency to currency. Because they high/low should more or less also determine the rhythm of the stock markets.

Also keep an eye on London! Let’s see if the Conservatives get a grip on their government this week? And then the market calms down…

DEVISE 2 DAY 48h
– Some Market Price Action News

US Equities March Upward, Give Up Morning Gains
US equities continued their rebound Tuesday, with the Dow gaining over 300 points, while the S&P 500 and the Nasdaq added 1.1% and 0.9%, respectively. Much of the initial enthusiasm over upbeat earnings in the morning session faded, with the threats of soaring inflation, rising interest rates, and flagging growth curbing risk appetite. Goldman Sachs, up roughly 2%, joined other big US banks in reporting quarterly results that surprised markets on the upside, helping eclipse the current economic gloom. Johnson & Johnson also beat Wall Street’s quarterly revenue and profit estimates. On the economic front, industrial production figures came in better than expected, signaling the resilience of the world’s largest economy against growing macro headwinds.

Orange Juice Hits 6-Year High
Orange Juice increased to above $205 USD/Lbs, the highest in nearly 6 years on supply concerns. The University of Florida released a preliminary analysis that said that damage to orange trees from Hurricane Ian reached between $787M and $1.56B. The full crop yield is set to be 28 million boxes, the smallest since WWII and down 32% from the previous year.

Wall Street Pares Gains
Wall Street lost some traction in afternoon deals on Tuesday, with the Dow erasing a 600-point gain to bottom around 30,500 while the S&P 500 and the Nasdaq added a modest 1%. Much of the initial enthusiasm over upbeat earnings faded, with the threats of soaring inflation, rising interest rates, and flagging growth curbing risk appetite. Goldman Sachs, up roughly 3%, joined other big US banks in reporting quarterly results that surprised markets on the upside, helping eclipse the current economic gloom. Johnson & Johnson also beat Wall Street’s quarterly revenue and profit estimates. On the economic front, industrial production figures came in better than expected, signaling the resilience of the world’s largest economy against growing macro headwinds.

French Stocks End At Over 4-Week High
The CAC 40 index rose about 0.4% to close at an over four-week high of 6,067 on Tuesday, the fourth session of gains, amid optimism around the reversal of a controversial fiscal plan in the UK and the ongoing earnings season. Meanwhile, the EU proposed another set of emergency measures to tackle skyrocketing energy prices. Domestically, schools and transportation were particularly affected by disruptions caused by a nationwide strike, which is an extension of the weeks-long industrial action that hit France’s major refineries and left more than a quarter of the pumps across the country fully or partly dry. On the corporate front, Alstom outperformed, rising 4.3%, followed by Legrand (+3%) and Saint Gobain (+2.8%). Publicis advanced 2.3%, after raising its full-year outlook for the second time this year, amid continued strong and better-than-expected growth in the third quarter. Eurofins Scientifique dropped 2.7% after posting a stronger-than-expected decline in Q3 revenues.

European Stocks Rise For 4th Day
European equity markets extended gains for the fourth session on Tuesday, with the German DAX adding 1% and the benchmark Stoxx 600 up almost 0.5% led by an over 4% gain in automobiles & parts and construction & materials companies. The European Commission announced another set of emergency measures to tackle the ongoing energy crisis but steered clear from immediate gas-price caps as countries remain split over the idea. Also, investors continued to cheer the reversal of UK Prime Minister Truss’ economic plan while the Bank of England said that a report in the Financial Times about a new delay to the start of its sales of government bonds was inaccurate. On the data front, German investor morale unexpectedly improvedn October, though it remained subdued and close to 14-year lows. In corporate headlines, Roche reported a 6% decline in quarterly sales, while Rio Tinto cut its annual iron ore shipments outlook as demand weakens.

Oil Remains Under Pressure
WTI crude futures bottomed around the $82 per barrel mark, a dramatic reversal from its daily highs of $86.5, as fears about a potential global recession-driven demand downturn continued to hang over the market. Investors have been growing worried about a deteriorating outlook for growth and demand amid intensifying macro headwinds, including high inflation and tighter financial conditions. On top of that, China’s fuel demand outlook weighed on sentiment after the world’s top crude oil importer delayed the release of several economic indicators. Pressuring prices further were reports that the US government would continue releasing crude oil from reserves. Putting a floor under prices were growing concerns about tighter global supplies as OPEC and its allies, including Russia, agreed to cut production further ahead of the European Union embargo on Russian oil.

UK Gilts Stable as BoE Set to Delay Bond Sale
The yield on Britain’s 10-year Gilt remained around 3.97% on Tuesday, below the 14-year high of 4.6% reached on October 12th, on expectations the Bank of England could delay again the sale of government bonds scheduled to start on October 31st. It comes after Chancellor Jeremy Hunt said on Monday he was reversing almost all tax measures announced in the mini-budget that have not started parliamentary legislation. Among other measures, Hunt scrapped plans to cut the basic rate of income tax from 20% to 19% from April next year. However, the planned cut to stamp duty and National Insurance will go ahead. UK Gilts have been under extreme volatility since last month when the government announced 45 billion pounds of tax cuts and unprecedented support on energy bills without saying how they would be paid for.DEVISE 2 DAY
– Where I Was Wrong, Were I Was Right

In the last few weeks, I have clearly focused on the Dow Jones Future. Having briefly completed a successful long 4XSetUps Trading Capability in the somemr; I’m also a bit confident that we will be able to recover a bit in the US stock market!? How wet?! We’ll have to show that – of course I don’t know that either. Which is why I formulated a long/short Trading Switch 4XSetUps Trading capability. More about that as usual in the Technical Analysis 4XSetUps.

In USD, we got to the 9/11, 2001 level quicker than I ever imagined. It’s probably like that for most people, so I wouldn’t be surprised if we might get a short, sharp devaluation. And then again in the medium term, even in the long term, to start again at a low level. But maybe that’s just my personal, subjective, individual paranoia, due to the incredibly good development in the last few weeks and months. Therefore also place the stop price at 110 USD index points. And wait until it levels off again underneath; so that we can then go long again cheaper. Should there unexpectedly be a fight for the 110 price zone, then we remain long above the USD 110 index point.

Just like us, we remain short UKOIL below USD 100.

Regardless of our 4XSetUps, let`s focus this week also on London!
Because the problems in the British capital market could spread to other countries. One possible fire accelerator is lending — and a special class of structured securities. Last week, the chaos days in Britain continue. Prime Minister Liz Truss surprisingly fired her Chancellor of the Exchequer, Kwasi Kwarteng, on Friday, replacing him with former Secretary of State Jeremy Hunt. At the end of September, Kwarteng’s tax cut plans triggered violent upheavals on the British bond market and sent the pound plummeting. After he had already withdrawn a cut in the top tax rate, Truss announced on Friday that he would raise the corporate tax as planned. This did not reassure investors: the yields on British government bonds rose again. The Bank of England (BoE), meanwhile, seems to actually want to end its emergency purchase program for British bonds. That`s why focus on the GBP vs. The other major currencies. I wouldn`t wonder, if he creates a trend-reversal, at these crazy times. But be careful. I don’t have to be the first, let alone the last – in any trend. And above all not in the GBPUSD cross-rate, which is currently being traded around historic lows…