Jackson Hole, will the market be disappointed again?

So, here we are again, another big day of news events, another possibility that by the end of the day nothing much will have been decided either way, another period of uncertainty.

Here are some of the things happening today, all of which could tip things one way or the other.

9am Italian unemployment figures for July

10am Eurozone unemployment (July)

2.45pm Chicago PMI for August

2.55pm University of Michigan confidence index for August

3pm US Factory orders for July

Market indices 20/50 dma - UK market - update 21

A quick look at the UK markets.  So far the 20/50 dma's are just about holding steady, the market seems to be in a wait and see mode before deciding what to do next.

With the FTSE100 I'm not convinced that there is the strength to maintain a consistent move above the resistance level of 5800 let alone mount an assault on 6000.  There would probably need to be some perceived resolution of the Eurozone problems, even if it is more of what has gone before - no real resolution - by the markets to move ahead really strongly.  However, it's still possible that there are one or two further upward moves to go before this rally exhausts itself and we get a more concerted correction.

As always, much may will depend on what happens in the US markets.  We have the US elections and the possibility of the fiscal cliff taking us into the new year.  In recent times the US political process has tended to push things to the wire when it comes to getting an agreement and the chances are we will see the same this time.  All of this may well lead to more volatility, although it could be 2013 before it really gets going.

On to the charts.

Video market round up for week ending 24th August

A week ending round up of the markets from Steve Briggs YouTube channel.

This week's video also takes a look at FTSE sectors and silver.

More videos can be found at http://www.youtube.com/user/sjb5555

Marks & Spencer, who's up for a bid? Should they be looking at Sainsbury?

When it was reported that banks were recently looking at the possibility of UK High Street icon Marks & Spencer as a potential takeover target, it was thought they might just be fishing for business.  There was some talk of a potential private buyout, but no names were mentioned.  Do we now have that name?

ADVFN market report quoted from Bloomberg;

Shares in Marks & Spencer jumped on Friday afternoon on rumours that private equity titan CVC Capital Partners is considering a takeover offer for the High Street group. It is thought that CVC is looking at an bid and has approached executives both inside and outside the firm “about a possible management role under private equity control,” according to Bloomberg which has spoken to unnamed sources close the matter.

Well, I'm not sure that Bloomberg actually went that far.  It seems that a bid was considered at some time in the past, but is not currently being pursued.

CVC Capital Partners Ltd. has explored taking Marks & Spencer private as the U.K.’s largest clothing chain’s sales slump amid a lack of demand for its fashions, people close to the matter said.

CVC approached executives both inside and outside the company about a possible management role under private equity control, said the people, who declined to be identified as the talks were confidential. The buyout firm has not moved beyond a preliminary examination of the U.K. retailer and is not currently thought to be pursuing a bid, the people said. 

Quantitative easing - a case of the rich getting richer

According to a report from the Bank of England, the richest 10% of the UK have seen their assets rise by an average of £128,000 or £322,000 depending upon the methodology used.

The Guardian reports;

Threadneedle Street said that wealthy families had been the biggest beneficiaries of its £375bn quantitative-easing (QE) programme, under which it has been buying government gilts for cash since early 2009.

The Bank of England calculated that the value of shares and bonds had risen by 26% – or £600bn – as a result of the policy, equivalent to £10,000 for each household in the UK. It added, however, that 40% of the gains went to the richest 5% of households.

However, the Bank was also quick to point out that everyone had supposedly gained because without QE, the economy would have been in a deeper mess.

 "Without the Bank's asset purchases, most people in the UK would have been worse off," it said in a paper prepared in response to queries from the Commons Treasury committee. 

The Bank's strategy has been criticised by groups representing savers and pensioners because of its impact on interest rates, annuity rates and gilt yields, which have all fallen since QE began, but Threadneedle Street was unrepentant. 

"Economic growth would have been lower. Unemployment would have been higher. Many more firms would have gone out of business. This would have had a significant detrimental impact on savers and pensioners along with every other group in our society. All assessments of asset purchases must be seen in that light."

This last statement is undoubtedly true, but that doesn't mean that it is right. This is the essence of the problem that money printing to try and prop up what became an indefensible situation presents us with.  It benefits those that it shouldn't, the con artists and fraudsters as well as the risk takers who lost.  It penalizes those that were prudent, who didn't get involved in things they thought were to good to be true.  And it tells you something about power and who has it.

A good example of this is UK house prices.  Prior to 2007/8 house prices had gone up every year well in advance of official price inflation on the back of loose lending, negligent regulation and the rise of mortgage products that were easy to fiddle.  Self-certifcation, designed for the self-employed and fast track mortgages were products which banks decided it was a good thing to not check the income claims of those submitting them.  Gordon Brown famously claimed after the financial collapse began in 2008 that the UK was different because unlike the US, we had not participated in products like the so-called "ninja" loans, no income, no job.  This was untrue.  The UK's equivalent of the ninja loan was self-cert and fast track, it just didn't have the same obvious fancy name and ring to it.  By 2007, 47% of mortgages in the UK were either self-cert or fast track, at a time of record mortgage lending and record house prices.  You don't need more than a couple of brain cells to rub together to see the real reasons for the UK's unsustainable housing boom prior to the credit crunch.

Market indices 20/50 dma - UK, US - update 20

Yesterday the markets finally had a little sell off that may well test the current upward trend.  Greece and the Eurozone seemed to be back on the agenda, or was it just an excuse to engage in some profit taking?  Given the number of times that the market has been worried, then not worried, about Greece, the euro, Eurozone debt, etc over the last year or two, it makes you wonder if it is often a convenient excuse.  Until something actually happens the chances are that these fears will go on.  Most of the fears are still speculation, It will be interesting to see the reaction if something actually did happen.  We will then find out if things are priced in.  I suspect not.

Market indices 20/50 dma - UK, US, Eurostoxx - update 19

Another start to the week, stocks still seem to want to go up.  Much talk about low volume and wait and see, is it a calm before another euro debt dilemma storm?  Who knows, but one thing is reasonably certain is that at some stage we will get a move down.  If the current upward trend really is strong then a move down would be healthy, at some stage it would find support and the market bulls could come back with fresh firepower to go higher.

For now, the markets seem to be taking baby steps up which are difficult for both traders and investors.  Good traders can trade these moves but probably wish for a little more volatility either way.  Long term investors are probably reluctant to buy in now after such a good run, but as we know markets and especially individual shares can always go up much higher and often way past the price at which the investor hoped to buy.  Even worse, often they don't come back, the opportunity is missed, just another dilemma that Mr Market puts in our way.  And when they do come back, it is often because the trend has actually changed, the knife is falling the other way and then the investor is reluctant to catch it, which for the most part is the right strategy, unless you miss the change in trend direction when it finally happens.

Quite often these small moves in the market are an indication of exhaustion in the trend direction and that something has to give either way, often in the opposite direction fairly soon.  Time will tell.  For now, the UK TechMARK and Eurostoxx index still look bullish as do the US markets.  The 20 dma on the TechMARK has been respected since early June.  Straight as an arrow upwards. Only the FTSE100 looks more in a consolidation mode.  All look pretty much overbought, but such situations can go on for longer than we might expect.

FTSE100

Tesco, a look at the weekly and monthly charts

I've commented a few times on Tesco, here and here, so there is no need to go over old ground as to why this big name on the UK High Street is potentially undervalued.  Tesco is looking to address issues in its home market and this won't happen overnight, the fundamentals in the UK part of its business may remain under pressure for some time yet, but from a technical standpoint the chart is looking better.

The weekly chart is beginning to look as if an uptrend is developing from the recent lows, price seemed to find a support level between 290 and 300p. While most of the indicators on this chart are looking more positive, there is no clear combination of signals just yet that confirm a new uptrend is in place, for example, MACD is still below the zero line, but the price is now heading in the right direction.  The potential break out of the Bollinger Bands gives the possibility that price could carry on going up from here and other indicators will then confirm the move.

FTSE 100 update

FTSE100 looks like it may be at a crossroads on the daily chart.  After the recent good run the MACD indicator is suggesting that a pullback may be due.  MACD has been above the zero line for some time, effectively confirming the 20/50 dma crossover to the upside back in July.  The Bollinger Band on this chart has also opened to the upside, but it now has a look about it that suggests it might be about to close.  The 20 and 50 dma are still positive, so, it is possible that the FTSE is pausing for breath before an attempt on 6000, or will it pull back to test the lower support levels and 20/50 dma.

The Dow has a similar look about it and where the US market goes the UK usually follows.  MACD for the US is slightly ahead of the FTSE in looking like a cross towards the downside could happen.  However, the MACD is still well above the zero line, so it still could either way.

Market indices 20/50 dma - UK, US and Eurostoxx - update 18

The markets are still in a steady uptrend, however, serious resistance points are ahead (covered by Steve Briggs market round up video here).  The question is how much more steam is there left in the current upward move?  Most of the news flow doesn't appear to be positive enough that the markets would steam ahead and in the case of the FTSE100 break through 6000 and then 6100, which has been a serious resistance level in the last year.  Markets try to look ahead and while it is just possible that much of the bad news is already priced in, any perceived bad Euro news could soon send the markets into a tailspin again. We have to be aware that the potential for a downward move is now greater as the current trend heads towards exhaustion.

For now, things are still positive and we await for price on the charts to test the 20dma and then the 50 dma if the first doesn't hold.  Looking at the charts, there is a little daylight between the averages and price, so there is still room for a sell off and the trend to still be up.

FTSE100

Market round up for week ending 10th August - video

A week ending round up of the markets from Steve Briggs YouTube channel.

The video this week also covers Standard Chartered and Barclays towards the end.

More videos can be found at http://www.youtube.com/user/sjb5555

Something for free - online trading/investment magazines

There are quite a few good online trading and investing magazines that are free to view either online or to download as a pdf and provide a useful educational resource.  Here are some that I have come across. Some you will have to sign up for and you may get some emails in your spam, but are worth it for the information provided free.

Traders' Your Personal Trading Coach.

http://www.tradersonline-mag.com/

YourTradingEdge

http://www.yourtradingedge.co.uk/

Spreadbet Magazine

http://www.spreadbetmagazine.com/

SFO Magazine (stocks, futures and options)

sfomag.com

Shares Magazine Archive (back issues, usually 1 month since publication available free to view/download, but buy the magazine if you like it and want the up to date information on the day of publication)

http://www.sharesmagazine.co.uk/view/archive

If you know of any others please mention them in the comments box below.

Market indices 20/50 dma - UK, US and Eurostoxx - update 17

If you have been following the regular updates posted here regarding these 20/50 dma crossovers, I don't think there is much to add to what the charts are saying accept that the trend is clearly up on all of them. Bears looking for a short need to be careful of any fall where the price bounces off and respects these dma's. I suspect a degree of profit taking soon and then we may well be faced with the question of how long this trend can last.  

Historically, the last quarter of the year, especially in the run up to the new year does tend to be more positive than negative, so as we are now into August and we have already had an extended summer rally, it will be interesting to see if we get a down move into autumn that takes us into the usual winter, Santa rally.  That, thankfully, is still some way off.

FTSE100

TechMARK

Monitise update

Since looking at Monitise a while back as one of those potential growth, but not for widows and orphans type stock, the share price has steadily gone down.  The trend on the longer term chart was down when they announced impressive results, mentioned in this post.  It carried on going down.  Today however, Goldman Sachs announced that the company had been put on their "conviction buy" list with a price target of 60p, which is more than double the current price.  The shares are up around 10% as of writing on the back of this.

Should be remembered that this company doesn't make a profit yet, but it has all the right ingredients to be a growth stock that could take off.  It's one of those DYOR and buy with money you don't mind losing if it backfires type stock. On the other hand, it could pay off handsomely if all things go to plan over the long term for the company.

Big ex-dividend pay day on the FTSE100 today.

Today is a day when some of the big names of the FTSE100 will be going ex-dividend and therefore it is possible that there will be some adjustment down in their share price.  It is always worth watching out for such moves because often just prior to a dividend payout the share price of a company may well have been rising, a case of good news already being priced in.  The dividend gets paid and the shares fall, sometimes not just by the amount equivalent to the paid out dividend.  This can lead to a buying opportunity.

Once the dust settles on such down moves it will often give a trader the chance to get back in as the price will often re-adjust back up, which is exactly what happened to Vodafone recently after their dividend and special dividend payment. For longer term investors, it also gives a chance to buy more at a lower price, assuming you like the fundamentals and nothing has changed as to why you hold the stock.

Standard Chartered - here for good?

No irony intended.

Standard Chartered bank ran a rogue unit that schemed with Iran's government to hide more than $250bn (£160bn) in illegal transactions for nearly a decade, according to a scathing report by New York regulators that may put intense pressure on the management of the UK-based bank. 

According to the report filed by the New York state department of financial services (NYSDFS), when warned by a US colleague about dealings with Iran, a Standard Chartered executive caustically replied: "You f---ing Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians." 

http://www.guardian.co.uk/business/2012/aug/06/standard-chartered-iran-transactions

Marks & Spencer - Takeover target or just banks fishing for business?

The Marks & Spencer share price has been up today on talk of the company being a takeover target.  My attention was drawn to it in the ADVFN morning market report because something didn't quite sit right with the story.

Here's what ADVFN reported;

"M&S was a high riser on the FTSE 100 after the Sunday Telegraph reported that the High Street giant is the subject of takeover talks. The paper said that bankers at a number of London institutions have assessed the possibility of providing debt finance for a speculative bid of £6bn."

How is the FTSE100 doing?

Last week the FTSE100 ended proceedings on a recent high, Draghi's failure to produce a bazooka on Thursday was outweighed by a positive US jobs number on Friday.  Market bears probably got all excited on Thursday only for it to be another shorter's false dawn come Friday.  There again, the charts have been telling us for a while that the trend is up and while you can go short within that trend, for the moment it would be unwise to fight against it.

Here's the simple 20/50 dma chart.

FTSE100

We now have some clear daylight in the moving averages, the 20/50 dma crossover to the upside has finally turned up for both ma's.

Here's another daily chart with a little more information on it, which does adds support to the simple chart above.

Market round up for week ending 3rd August - video

A week ending round up of the markets from Steve Briggs YouTube channel.

As well as a round up of the FTSE100, Dax and S&P, the video this week also covers Rolls Royce and Facebook towards the end.

More videos can be found at http://www.youtube.com/user/sjb5555

Market indices 20/50 dma - UK, US and Eurostoxx - update 16

All of the major indices are now in an upward trend on the 20/50 dma crossover to the upside.  Some weaker than others with the FTSE100 being the main lagging index as it struggles to sustain a move above 5700, which has been a solid point of resistance for a while.  It's about 30 points above that as I write, but could be a lot higher come tomorrow if the market likes what ECB banker Draghi has to say later today.  Or lower if he doesn't say or do the right things. Or is it all in the charts already - Should you follow the news?

The UK TechMARK and Eurostoxx index still look fairly bullish.

Price action on the Dow and S&P are now clearly showing daylight above the 20 and 50 dma.

These charts look bullish despite the news, the trend is clearly up, but it seems to be on expectations that the Central Bank's, or today the ECB, will do or announce something.  If they don't, it will be interesting to see how the market responds and whether the current more bullish trend holds.

FTSE100

TechMARK

Eurostoxx 50

Dow 30

S&P 500

Rightmove - the wrong move for the shorting housing market bears

Over the last few years I've read quite a few posts on various forums calling either a top or short for Rightmove.  More often than not these posts don't make much reference to timeframe, although many seem to make reference to the struggling UK housing market, the crash to come in house prices and that surely Rightmove should be ripe for shorting as it would fall alongside this housing market collapse.  Unfortunately for the bears, Rightmove has defied stock market gravity and simply gone up and up and up....

Here's the Monthly chart of the last 6 years or so.  Each candlestick bar represents a month worth of trading activity.

Nice momentum there since about 2009 with absolutely no let up in the relentless rise from around 162p at its low in Feb 2009 to an impressive 1600p today.  Nice 10 bagger if you could have got it!

For those looking to short this stock, times have been tough.  You may have got the occasional downturn to catch on the Daily and 4 hour charts, but you would have needed to keep a close eye on it as this one has been up all the way on the longer term chart.  In fact, this is a stock where arguably you would only want to be trading the long side until something gives on the longer term charts.

Still, does the MACD suggest on this chart a move down any time soon?  It is clearly in well overbought territory and we might just be getting a crossover to the downside, but there needs to be a warning here.  The MACD is a long way above zero and as this is the monthly chart we could be at least 6-12 months away from it happening, if indeed it does. At some stage we will get a move down, but I for one wouldn't like to call when.

From a fundamental point of view Rightmove is still producing.  Today's results have seen the share move up 8% as I write.

LONDON (SHARECAST) - Property website Rightmove said trading in July continued to be strong and it is confident of achieving company expectations for the year.

Profit after tax increased 36% to £29.3m while underlying operating profit rose 28% to £42.6m for the six months ended 30 June 2012. Revenue jumped 23% to £57.9m.

Average revenue per advertiser rose 20% to £518 per month while the number of advertisers was little changed at 18,299 from 18,276 the year before.

The increased spend came from price rises and sales of additional advertising products, Rightmove said, with 80% of agents and new homes developers now taking at least one additional advertising product compared to 70% at this time last year.

Underlying operating margin increased to 73.5% from 71.1% the year before while underlying earnings per share climbed 30% to 32.2p.

"Trading was strong in the period with the results also benefiting from customers increasing their spend more sharply than usual at the start of the year and the strength of our data services business which included some one-offs," the group explained.

http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=20267680

I suppose the point to note here is that almost regardless of house price inflation or deflation, Rightmove gets business from the industry regardless.  Rightmove bears need to take note.