Mr. Scott's Crayon Thread

No it is fine, just don't trade it. Too bad I saw a shark right away would have been nice.

Hi Scott

You know I don't know my B.....at from my elbow but here is my daily and the bits I like. Of course will be scavenging like a 3 legged dingo at everything in between too

Hi Jambonn,

First of hope the below is helpful. When there are questions on issues that interest me and I am watching I like to respond as writing them down keeps me fresh on the issues so sorry for the rant if it does not add any value.

First of if you are not an experienced trader then I would certainly stay away from the Lira and possibly most emerging markets at the moment. If you understand the issues, volatility and risk then that is probably a different matter.

Quick summary of what I understand Turkey has to deal with at the moment. There are three things that drive the markets, thus three types of trades; Political, Fundamental and Technical. Turkey is political and fundamental at the moment so unless you are across these issues then would not trade. You may get lucky on some short term volatility but that trade has a lot of risk associated with multiple unknowns.

Turkeys Biggest Political Issue I am aware of
- Recent coup and ongoing issue for Erdogan grab for more power
- Countries involvement in the Syrian war
- Freeze in process of joining EU leading to capital being pulled out of country. Turkey relies on foreign capital to finances its deficit. Risk now being priced into the credit defaults swaps. Keep an eye on these for investor to start seeing price value in Turkey again as will come in form of credit.

Turkeys biggest Fundamental issue now I am aware of
- Just is reliant on debt and when you have recently expanded like Turkey did on zero rate debt then you obviously have some problems when the US dollar interest rates are set to increase and your dollar is also falling against the original value of that debt.
- Most debt is bought in Euro Dollars (external US currency) with the massive debt burden of Turkish banks and companies they need pay back in Euro dollars and that burden is increasing rapidly and forecast to grow with increasing rates in US
- High Inflation, High unemployment, low savings rate, stretched level of borrowings (Similar to Greece?) but with a floating currency and no Euro to help.
- 1/4 of debt set to rollover this year

Technical
- Huge volatility play. So unless your well read, close to all issues in Turkey and also its relationships I would not trade.

Only defense Turkey Central Bank has is to increase rates or intervene but as was played out a couple of weeks ago with Mexico Peso that is almost a losing game. The only trade is up at the moment but fraught with danger as at anyone time depending on anyone of the above situations you could quickly get a big move to the other side which you will not see coming. I was trading this currency mid last year but would not trade it at the moment.

In my view Peso is a better IM currency to watch as it has one fundamental to watch and that is Trump, his team, their verbiage and the reality. Turkey has multiple longer term issues. Bear in mind that all emerging markets took full advantage of the low rate, excess liquidity in the market and may have a high price to pay if thats starts to rollover.

Hope this helps.

Some watch list charts for me on AN and NC.

Some of my chart thoughts on AU with the SPX and Iron Ore Index. I think for AUD to spike through we need the SPX to continue up along with commodities pricing. Anyone have any thoughts on this?

My mapped out long term NU chart. Am watching that election level area.

Aussie and Kiwi CPIs on Wednesday/Thursday.

Thank you so much Mr.Scott to give your time. I think this shark will get it 3'63-3,65 than 4. Is it true or It will go up from 3,73 to 4 up?

I think we're due a bigger run than we've already had, it's been a long wait and I reckon there is at the very least more hope to be squeezed out regardless. So my money is still on coal and iron ore and those sort of things. But still I've a eye on the exit at all times.

Here's something I just saw.

https://nftrh.com/2017/01/23/the-spe...breaks-upward/

I saw an spx chart that struck a chord with me at the wknd. I'll try and find it. Found it

http://ciovaccocapital.com/wordpress...l-run-in-1982/

I'll leave you with this one. Buenas noches.

http://www.dailymail.co.uk/debate/ar...ed-Brexit.html

Hi Ben,

Thanks for the links there was some good reading. Def agree on the possibility of more squeezing and more upside. I think the SPX pushes higher Mid term as well but thinking it may!? be likely to test breakout level prior.

Some of my thoughts right or wrong.
One thing I will be keeping an eye is the 10 year. For me this is driving the market and I think it depends on your take on 30 year bond bull market is the 30 year bond bull over. If you believe Dalio and some other Hedge fund managers then this bull market that has also driven the equities market may be coming to an end. Bonds, based on history nearly always change direction prior to stock market. The setup is very similar to what happened in 87. Bond prices free fall and commodities spike 6 months or so prior to crash creating a possible weak footing for the market.

Commodities seem mostly speculative to me at the moment. I have not seen any thing displaying real demand. China bought up but is fully stocked and speculation is on Trump so think this will have a lot to play into the continuation.

An interesting chart below is Coking Coal (used for steel manufacturing) and Steel/Iron ore Index. Coking has been sold of and possible closing down the spike. Be interesting if its leading (as used in production) or just a lot more volatility on a new trend. Whats interesting is that the price was not built on huge demand like we saw in the China build up but on a complete lack of supply into the market with major mining companies stopping the production. I think this is interesting and for me leads more to the thought that we have seen the commodities bottom but I don't feel the continuation of a big run up at the moment based on spec positions and no real massive increase in demand. I not saying that won't happen with Trump but it is yet to be seen from my thoughts.

Its a great area of discussion and broadens the Inter market thinking long term.

Thanks Ben

Looks good, just took a look. Nice looking chart for opportunity.

Having a quick go before Bed Scott?? I think these setups are looking really nice at the moment. Nice levels

Stupid NU did a 786 on weekly, I wanted 886 and missed it.

weird she looks like AU....

They are identical setups at the moment and both at the bottom of the daily election level. Level is looking good and price seems to be starting to fade. Interesting to see what the London open holds.

some AU, had some by pending order, now 382 hitted

NJ, almost hits 382

Nice chart Derek. The bulls seem to be getting thinner in the squeeze. You have the Aussie CPI tomorrow so that could be interesting. Im thinking a good figure for Aussie at the moment but will be looking to sell into any squeeze higher.

Its tough call.

Heres one I am keeping an eye on Derek. Singapore set to lose the most the with Trumps pulling out of TPP deal.

Posted by Lance Roberts on his Twitter feed but he is a constant bear....I like the chart.