Lance Lai appeared on Peter Switzer’s TV show “Switzer” on Sky News Business Channel on Wednesday 6 July, which can be viewed here [1]. The following are in depth notes in preparation for the show.
ASX 200 – 5,688 down to T3=5,556 & S = 200day ma 5,505 (-2.4%to-3.2%)
Historic Note
April 2016 show 5,187 where first identified.
T1=5,300 +2.5%
T2=5,466 +5%
T3=5,556 +7.1%
Got there December 2016.
Now
Expect the market to retrace back to T3 and 200-day moving average, i.e. down 2.4% to 3.2%.
Then back up to new White T1 = 5,998 = up 5.5% from here.
This is significant 9% increase from S pull back to T1 may be expected (5,998 from 5,505).
US S&P 500: 2,344 To Retrace to S = -2.8% to -5.1%
Historic Notes
23 months to Oct 2014 – broke out of trend channel.
25 months sideways to 10 Nov 2016 – broke out of sideways range.
Shot up to 2,401 by 1 Mar 2017 = 11.6% in less than 4 months.
Last night saw 1.2% fall.
Outlook
Retreat back to:
S top = 2,278 (-2.8%)
S bottom = 2,224 (-5.1%)
Ultimately the new target = 2,472 (+5.46 from here or +11.1% off bottom range bounce)
Shanghai Stock Exchange: 3,094 Still Range Bound
R1 = 3,749
R2 = 2,628
Big range of 1,121 points of 36%.
Positive signal – been above 200 day ma since 10/10/16 = 5.5 months.
Steady as she goes with upside bias.
A = April show of 27th, 2,967 now virtually unchanged after huge volatility.
This market has been very stable after huge swings you can see on the left.
Show of April 27, 2016
Outlook – Range Bound of still 30% with R1 in focus again
Revised R2 down to 2,628 as support.
R1 Unchanged: 3,749
Remember: Foreign reserves of about $4 Trillion. They have options.
GBP/US$ 1.247: Outlook range bound
Historic Notes
1) July 2016 Show @ $1.291 projected
$1.259 = -2.5%
$1.212 = -6.5%
T = $1.1822 = -9.2%
2) Sept 2016 Show @ $1.304 kept projections from above
Stimulus by BOE 5 Aug 2016 – Marked BOE – Pound 170B stimulus.
N = 1.305 = Neutral price. It is stabilising around this mark for now.
Added Neutral rate of $1.305 that if broken would fall to $1.1822.
7 Oct 2016 got to $1.145 – so frantic it read low of $1.182 for 24+ hours.
Outlook
Range bound between above levels $1.212 to $1.259 = 4.7c range.
Tentative looks good for a rebound up.
Past Show Notes
S = 20 Sept show 1.3039
6 October fell to 1.1820 at 11.05pm Sydney time, but falls so rapid, revised numbers got to $1.145 on the chart above.
Hit target of 1.1822 = 9.3% lower target projected on 6th July show hit.
Low was $1.145 = 12.2% fall.
Now $1.2273 = 7.2% recovery from low or 3.8% from my target.
200 day MA = $1.3787 = 12.3% higher.
Last time it was 7.4% higher so that has extended.
Needs to bounce up – really holding onto 1.2128 level.
Should test $1.2597 = 2.6% higher in short term.
In 19 months since 15 July 2014, market already factored in a potential “Brexit” result, falling 19.5%. This was more of a “hedge” as those with significant interests de-risk out of the UK early just in case.
Stimulus by BOE 5 Aug 2016 – Marked BOE – Pound 170B Stimulus
N = 1.305 = Neutral price. It is stabilising around this mark for now.
In the medium term, the chart still has those lower levels in view: largely unchanged from last show.
Levels: I have two others in between these but for simplicity of the display on the show:
1.2597 = -3.4% lower (-19.2% from peak)
1.2128 = -6.9% lower (-23.8% from peak)
1.1822 = -9.3% lower (-27.0% from peak)
In Lead up to the Vote
In the last three months, March to June, the Pound stabilised, tested and went over 200 day moving average of $1.467 on 23 June with 10 hours to the vote.
In 3 months went up over 6%
On day of vote, went to 1.5018 – implying remain vote winning
24 June: 1st day fell to 1.3224 (-13.5%) – the markets were not expecting a Brexit win
2nd day fell to 1.3118 (-14.5%)
Some reprieve for the next six days as the Pound stabilised – this is a technical phenomenon. After such large falls, sellers need a rest.
8th day: last night fell to fresh low 1.2796 (-17.4%)
Now recovered to 1.2916
Levels – I have two others in between these but for simplicity of the display on the show:
1.2597 = -2.5% lower (-19.2% from peak)
1.2128 = -6.5% lower (-23.8% from peak)
1.1822 = -9.2% lower (-27.0% from peak)
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