Stock market, Forex and Commodities trading and spread betting courses, video analysis, trading software and personal trading help

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.

June 14th 2020

Hello again, and welcome to yet another weekend defined by the ongoing lurgy response fiasco.
Where to begin, eh? I think the "14 day quarantine" nonsense qualifies for top spot today. Some of the airlines are challenging its validity, but of course Babbling Boris Wooster and his cover-up specialist ConDom are adamant that it is indeed valid and will keep us alert and saving lives. Now 'tis obvious to a normally intelligent five year old that the notion that this travel quarantine will help fight the lurgy, is complete nonsense. However, reducing the spread of the lurgy ain't the reason for it - not even slightly. The plan is to reduce the spread of holidaymakers. In other words, it's Brexit-related, not lurgy-related. Think about it! Even the Babbler must have enough grey cells to be well aware such a policy won't make a jot of difference to CV19's spread or otherwise at this late stage. I reckon ConDom pointed out to him that an awful lot of Brits spend an awful lot of dosh each summer, particularly in France and Spain. How many fewer might make the trip if a fortnight's quarantine awaits them upon their return to these grey shores? You might be charitable (moi - charitable?) and suggest "Ah, it's to try to help Blighty's holiday industry get back on its feet - people will just holiday here - how clever!" But I don't believe that's the motive, not for a nanosecond. The true motive I reckon is to deny income to the French and the Spanish in particular, and in a nutshell, it's part of the leverage the Babbler's Brexit negotiator can apply in Brussels. I suspect that once it's a wee bit too late for most folks to have been able to plan/book a holiday in the sun, the quarantine will miraculously be lifted, or sooner if Barnier gives way a little more than at present over some of the current sticking points, under pressure from zee Emperor Macrumb.......

In other lurgy-related nonsense, I note that zoos and safari parks will be allowed to reopen in England. I wonder if the animals were asked if it was OK for potentially lurgy-infected humans to be allowed to visit? And "non essential" shops will be able to open again too (an indoors environment) but beer gardens will remain shut (an outdoors environment, I believe, so less allegedly "dangerous").... Duh.

But to move on in more serious vein, are you impressed with the NHS? I can tell you, I am deeply unimpressed. Now before you get all aerated about that comment, let me just say that I have always been impressed - indeed in awe of - those who work in the front line thereof. The doctors, surgeons, nurses, paramedics, auxiliaries, cooks, cleaners et al. I couldn't do a job like theirs, and they thoroughly deserve our support at all times. BUT - and it's a big "but" - many weeks ago now it became obvious that the lurgy wasn't going to come anywhere near "overwhelming" the NHS. So why hadn't they been "normalising" everything else those many weeks ago? Who actually runs the service? I reckon it's time for an immense shakeup and for a whole lot of management heads to roll, to be quite frank. One of my relatives (a now retired heart specialist of international renown) has some pretty scathing words to say about managers within the NHS!

The Torygraph reports a 60% drop year on year in "urgent GP referrals". That's just plain disgusting, frankly.

And while I'm still in rant mode, what about schools then? I gather that fewer than one third of pupils in England and Wales have had any contact at all from their teachers since this mess began - according to the Grauniad. I don't know that figure as applied to Scotland, but I do know that granddaughter (who should be sitting her Standard Grades - called GCSEs in England?) has had very little by way of contact and when she does hear from a teacher, and gets stuff to work on, she never gets any feedback after submitting it. Likewise a friend's daughter who should be spending a few weeks in the "big school" before the end of term, at the end of her primary schooling, has had zero contact from her teacher. None. Nada. My view is not that teachers are scared of catching the lurgy, nor are they bothered about the children. I accept there will be honourable exceptions to these remarks, but I reckon they're just plain lazy, having a great time at the moment, and on full pay at that.

So there you go then - dump the Babbler and that Krankie creature, get IW to run the show, and not only would lockdown end now, but the NHS, the schools, and of course the care homes, would be under new management right away, run by true professionals in their field..... Hmmm - maybe just a slight problem there for you, IW? Professionals? How would you know?

Oops - time to move right along then.

Moving right along, what about stuff I do actually know a wee bit about?

Well, yet again there are job losses to report. Among the bigger numbers thereof in Blighty are 3000 from Restaurant Group, 5000 from Centrica and 2500 from Johnson Matthey.

In Germany, Lufthansa is planning to divest itself of 22000 staff. Worldwide, BP plans to dump 10000 this year. And so it goes on, sadly.

But will things recover quickly once the lurgy fear has finally left us (if it ever does!)?

nfortunately, no. There are vast numbers of job losses still to come, and the lurgy fear will be replaced by financial fear. Already that effect can be seen - a Bloomberg piece the other day told us that "Household deposits (to banks) in the euro area's four largest economies jumped more than €100bn in March and April, three times the average pace of growth over the last decade." That's people not spending dosh, but saving it, and in no way is it all down to shops being closed. Once the shops are all open again, for a week or two spending will rise as people buy stuff they were planning to get anyway. After that wee splurge is over, they'll be running to the banks again to deposit as much as they can manage, I reckon. "Saving" will become cool.
Mind you, people will have to buy cars! Apparently (unless this crazy 2 metre rule is rescinded soon) the lack of public transport capacity will see over a million extra cars on the roads of England and Wales, according to the RAC. I have no figures for Scotland of course - our Beloved Wee Leader here doesn't allow anyone to know nor say anything that might be adverse.

Of course there will be more cars on the roads! Not everyone can walk/cycle/crawl on all fours to work, and what about Blighty's weather, eh? So I expect that the used car market might get a bit of a fillip for a time - and those paying hundreds and hundreds of pounds for a PCP thingie might be handing their vehicles back and trying to buy a banger instead, just to keep them in wheels. If Arthur Daley were still alive, he would be rubbing his hands! (Just to give you a PCP example, I took a look at a new Discovery Sport because that seems to be a supermarket car park special in these parts. £840 a month for five years, plus a balloon payment at the end....Duh.)

Oh - and lest you think I'm being a bit hard on Bertie Wooster (aka Boris J) and his bunch of equally inept chinless wonders, I note the OECD's words - "Due to dither and delay, the UK is the world's biggest Cov19 casualty". Damning indeed! And sadly, true.

Across the Pond (I have no figures yet for Blighty's position here) it seems that the "small traders" are really giving it big licks. 12.1 million call options were bought between 1st and 5th June. CNBC reports that "Buying the shares of bankrupt companies is all the rage". Hertz, Whiting Petroleum, JC Penney and Pier 1 all saw their share prices rise by 70% or so last Monday. Duh. Double Duh! The Nasdaq's DSI (Daily Sentiment Index) shows a 94% bullish reading...... "Tesla is now the world's most valuable car company" says the Torygraph.
Google searches for "day trading" and "call options" are at record highs.

Are people totally nuts? Oh, I believe you good folks know the answer to that question! It all smacks of desperation of course, sadly.

Onward then to the "no sh*t" department.

How about this from the intelligent folk at the Grauniad? "UK retailers face declining sales amid Covid-19 shutdown". And from Reuters: "Britain facing hardship ahead, its finance minister says." Across the Pond, the Fed suggests that "The economic effects of lockdown may be long lasting". It's very comforting to know how safe we all can feel with these people in charge!

Only three links to take a look at today then, moving along. The one about Faceplant certainly resonates with me - as you know, I'll be absolutely delighted when eventually it goes bust and Zuckerberg is serving coffee at Starbucks. "Pernicious" doensn't even come close to describing that company!

https://summit.news/ - Facebook is "Destroying the Very Fabric of Human Relationships"

and
https://alhambrapartners.com/ - There Was Never Going To Be A 'V'...

finally
https://off-guardian.org/ - Over 95% of UK "Covid19" deaths had "pre-existing condition"

OK - onward to a chart or two, and first there's a look at Centrica, seeing I mentioned it earlier. There's another countertrend channel to be seen here, but also some horizontal resistance that might suggest we'll see higher prices if it's broken and a gap filled. Then there's also a channel to be seen on the Johnson Matthey picture. It's all about countertrend channels today folks!

ext is the same thing on the Bovis (now renamed Vistry Group) chart...... Then there are a couple of Yank charts to look at, both sporting "island reversals" where there was a gap up followed quite quickly by a gap down. The one on the DJIA chart is less "classic" than that on the Nasdaq 100, but it's still valid. The Nasdaq drop from its reversal is a doozie, given it came after an all time high was made.

That's your lot for this weekend then folks. The rain has stopped so perhaps it's time for a brisk walk to get away from the computer for a short while. Please remember to speak in slogans in order to save Bori....to save lives. One swallow doesn't mean you have the lurgy.....

All the best till next weekend, whatever these idiots dream up next!
Ian.

The rest of this post, which is the charts and analysis, is available to TEW 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.

Enrol Now
'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'.

 

Skip navigation Home page Site Map Contact us FAQs Terms and Conditions Top of the page Accessibility Statement