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FTSE100 - WILL LONG TERM THINKING WIN?We are currently seeing a 30-40% adjustment in the markets due tot the impact of Covid-19. After last week's crash, governments have announced economic relief bills of unprecedented sums of money that have turned the market bullish. Although such "rescue packages" are effective in the short-term, they cannot cover long-term economic damage that is expected to result from restrictions under Covid-19 and the oversupply in oil. Most countries in Europe, and the US have not yet seen the peak in cases and deaths as the corona-virus keeps infecting and killing. Governments are imposing tighter restrictions and Italy is considering moving to a "war-economy" that will shut around 70% of the economic activities. Although other European countries seem to have a less steeper increase in corona cases and deaths, it is very likely that most economies will need to shut down more and more over the next coming weeks. Many suggest that the US will become the new "epicenter" of the disease as the virus continues to develop. Some experts say that the virus may slow down in warmer weather, and future infection-waves may be inevitable. Now, let's back this up with some historical and chart analyses: > CCI wave end of Mar-20 similar strength as in Jul-02 and Sep-08. In the latter two instances, both where followed by a less powerful bearish market that despite the lack of strength pushed the market down further. The time frame between the two waves is from Jul-02 to Jan-03 (+/- 6.5mo) and Sep-08 to Feb-09 (+/- 5mo), averaging around 6 months. > The above is supported by: - applying the Elliot-wave theory on the downward trend in the index, which have been very applicable in the past recessions as the chart shows. In 2020, we have seen two downward impulse waves (A,C) and are currently in the second correction wave (D). Correction went back to 0.38Fib, whereas correcton D went a little over 0.38Fib and therefor may first continue upwards to 0.50Fib (c. 5850) or even 0.62Fib (c. 6100) before continuing with the last wave. - MACD suggest a strong bearish market that is not close to cut the base and move into a bullish market. > Assuming the Covid-19 crisis will lead the economy into recession with similar impact on the economy as the 2003 and 2008/9 down-cycles, the index will be falling towards or just below the 4000 points around June or July when the real impact of the Covid-19 restrictions will be felt in the economy. However, the bottom may be strongest in May when Europe at the end and the US at the start of the Covid-19 peak as panic kicks in, hospital capacity is reached and economies need to be shut down almost completely. Also, most analysts are focused on emerged economies but most companies on 1st world stock exchanges have significant economic and market exposure in emerging markets where healthcare, governing and economic systems are not as sound, and where the impact of the virus may not be controllable in any front. > The above is all subject to the developments of Covid-19, but also the lower oil price that is expected to remain low throughout April-20 as Saudi Arabia and Russia will not ramp down production to stabilize global prices. It will be interesting to continue monitoring all developments and see how the world reacts to a problem that we have never faced in modern times.
TVC:UKXShort
by engelandertje
GBPUSD 4H from current area Long buy idea from current area 1.3010 - 1.3050 TP1 : 1.3184 TP2 : 1.3283 SL : 1.2873 This is not an investment recommendation or any call to buy or sell It is just an analysis based on a study of the history of price action Behavior , that may not be a necessarily reason for the success of the structure or repetition. So please make your decision based on your vision . To protect capital and manage your deals and trading successfully the maximum loss in each transaction for the same currency or commodity in the same direction should not exceed ( 2% ) of the capital . Good luck >>
Long
by Golden_Spiral
Recession in Japan, China's stimulus and UK’s dataPerhaps the main event and surprise of yesterday were the devastating data on Japan's GDP for the fourth quarter. The country's GDP fell by 1.6% (the forecast was a decline of 0.9%) in terms of q/q and 6.3% in relation to the same quarter last year (the worst result since 2014). This is a very alarming signal for the global economy because Japan is the third-largest economy in the world. And although the reasons for such a failure are generally justified - a destructive typhoon and tax increases, the picture does not become less depressing. Given that China is Japan's largest trading partner, there is every reason to expect weak data in the first quarter of 2020 (consequences of the coronavirus epidemic). Do not forget about the loss of the tourism sector in Japan from China's ban on the travel of citizens. We are talking about hundreds of thousands of tourists from China who were supposed to visit Japan but did not visit with all the ensuing economic consequences. The second consecutive quarter of GDP decline is already officially a recession. That is, what we have been talking about for quite some time in our reviews is beginning to take on an increasingly clear line. What is characteristic, the Japanese yen against the background of such crushing statistics were not exposed to sales. Obviously, the demand for a safe haven asset in her person outweighs the desire to sell the yen to work out weak data. In this light, our desire to buy gold only intensified. Purchases of the Japanese yen, despite such weak data, also look good from current points. China, meanwhile, maybe trying to generate optimism after several weeks of continuous negativity. And this is not only about the statistics on the epidemic, which is beginning to decline but also about the position of the Chinese authorities, who yesterday promised to strengthen the stimulation of the economy in order to compensate for the negative consequences of the coronavirus. It is planned to reduce corporate taxes and increase government spending. Despite this positive, we believe that the damage has already been done and the world economy will still feel it in the first quarter. And the epidemic itself is still ongoing. According to experts, the Chinese economy will return to less or less normal functioning no earlier than in a month. In this regard, we recall our recommendation to sell oil. Demand for oil from China continues to fall, and refinery loading drops at a gigantic pace (at some plants, the decline was 10-20%). According to Citi analysts, the total volume of oil refining in China fell by 2 million barrels per day, while oil demand in China in February may show a decrease of 3.5 million BPD. These are very serious figures for the oil market. So we use any attempts to grow the asset as an occasion for its sales. For the British pound today is a pretty important day in terms of macroeconomic statistics - a block of data on the UK labor market will be published. In the past couple of days, the pound has somewhat lost its fuse, which was received in the form of promises to increase government spending. Today's data can either increase pressure on the pound, or give it the opportunity to return to growth. So we follow the numbers and adjust the positions depending on the nature of the data.
Short
by Trade24Fx
Diversified Gas & Oil - Longterm Hold - ISA Investment Possibly?Industry Sector - Energy, not exploration (so plus point). Rough Technical - Presently support 96p and resistance around 110 - 120p, though the stock ranks low for general momentum and quality. Present Presently 103p at 20200116. Price peaked at 125p in Jul 18 and 19. I am thinking of entry between 90-100p. Jan 2020 it is trading on future earnings of 8 thimes, which is average for the industry, though the sales growth has been phenomenal, so this could be a cheap share if the sales growth continues. History - Came to market in 20170203 at around 55p, gas and oil producer. The Company is engaged in conventional natural gas and crude oil production in the Appalachian Basin of the United States. The Company owns and operates over 7,500 conventional natural gas and crude oil wells in Pennsylvania, West Virginia and Ohio. The Company's daily production is approximately 60,000 barrels of oil equivalent per day, which consists of approximately 26,000 million cubic feet (mcf) per day of natural gas and 475 barrels of oil per day. The Company operates over 3,000 wells in Ohio on approximately 164,000 leased acres in multiple counties along the I-75 corridor. The Company operates approximately 235 conventional wells in the West Virginia state and holds over 6,500 acres of leasehold. The Company operates over 4,000 wells and approximately 863,000 leasehold acres, in Pennsylvania, over multiple counties. Accounts trade in dollars - so currency risk, as I am based in UK Income - First dividend was at 5%, next dividend is forecast to be 9%. Div cover is over 7 times. Next Ex-Div date is 20200305 at 3.5 USX (2.5p UK) - though early to estimate, looks like 2 dividends a year March and September, though last year was 3 dividends. Share liquidity - Heavily buying back shares from the market, directors have shares at around £1M at around 107p, In April 2019, Diversified Gas & Oil announced a maiden share buyback scheme of up to 54.3m shares representing some 7.8% of the company’s outstanding share cap. The move is essentially a call on the relative merits of buying back stock versus using excess cash after dividends for further acquisitions. DGOG suffered a "bear attack" in Jan 2018 and Directors bought to support. 3 month volume is over 700k, so passed my personal threshold of 120k. 49% of shares are held by investors with less than 5% holdings (this is good for liquidity and price discovery). Cashflow - Really only 2018 to see, sales income $201M, after admin etc.. $87.7M, Negative CF of -$767M (acquisitions) (this was funded from issuing stock of $426M and debt of £304M, plus retained cash). Overall retained cashflow was neg $13M, was Poss $24.9M year before. So early for this company which has been around 6 years. Profit / Loss - Again only 2018 to view due to age of company. Revenue $290M, GP $140M, Op Profit $287M, Net ProfitBT $201M. Diluted EPS is 22.4p BS - Nothing too awkward net assets are $749M. Tough it flags on my bankruptcy checker at cautious. Proposed Listing upgrade - In September, the AIM-listed firm announced plans to move from the small caps to the premium segment of London’s main market after the publication of its full-year results for this year, to be released during the first quarter of 2020. As part of the preparations for the main market, the company has completed a tender process to sign-up with a ‘big four’ accounting and auditing firms, for the fiscal year to end 31 December 2020. If it moves to the main market, then ETF's will be buying the share eventually (though AIM ETF's (which are smaller) will be selling. The main Risk - Shale Gas - DGOG is heavily into the "dirty energy", not the cheapest to extract and is dependent on gas prices. For shale oil (not gas) the break even point is supposed to be somewhere around $40 per barrel, though it has been reported that that price is for the best sites, the horizontal sites are around $60 per barrel, with some rumoured to be $90 per barrel. This basically means that some shale oil sites are left idle when the oil price drops. I assume this will be the case for shale gas if gas prices fall low enough, at the time of writing (Jan 2020) the present gas price is $21.00, basically the lowest gas has been since 2016, 2012, 2009, 2002. So presumable shale gas producers must be running on tight margins. So this is the main risk. I n the UK an ISA is like a mix between the US a 401K and IRA - but with softer tax rules. I do not have a position as yet, but I am considering it - so please add comments if you like.
DLong
by OldManFit