Google – Wave 5 is on

Amazon sold off from the 5th wave position discussed last week. So how did Google do? I have covered this chart twice before, once in 2015 projecting 5=1 to 1100. Then I considered the 2014 period as a triangle. It still is. But one change. In 2016 I marked the rise as an ending pattern. After that prices formed a running triangle. So this running triangle is also a 4th wave. Running triangles happen in the final stages of a move so the 5th wave forming now is the final advance for Google long term. I cannot say that it is over but the next trend reversal would be important long term. The trendline of all the highs is at 1060. Once the 5th wave completes we will dip back below the 800 mark.

Dollar Index and USD GBP – Technical Analysis

Dollar Index

On the weekly charts the dollar index retraced 61.8% of the entire previous advance. Also at the point marked 3 sentiment was down to 5% bullish only. Now it is possible to mark the fall as a 5 wave decline except that wave 5 is too short and truncated. That I did not expect. However as we have moved past 97, it is a possible outcome. What this would mean is that we retrace some portion of this 5 wave fall before another decline can occur. 98 would be the first immediate hurdle. 98.23 is 38.2% of the 5 wave decline. A larger retracement would be 61.8% at 99.50. There is reason to be open to some bounce back in the dollar before another wave down starts till 96.455 holds.

USDGBP

The one currency supporting the strong dollar thesis has been the Pound. USDGBP has still to complete a 5th wave on the quarterly chart and after the 38.2% retracement and the elections the stage maybe set up. Wave 5 up for the contracct would go up to 0.90 based on 5=1

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and international clients. Views expressed in this article are purely of the author – Mr Rohit Srivastava – a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

 

Commodity – Technical Analysis

Gold is sitting on its 20dma at 1263, but it has witnessed a trendline break. So I want to highlight that there were two trendline breaks in the last year and both saw steep corrections in Gold prices. So maybe I need to be open to the idea that this break too can be one. Below 1263 we would go back to test the trendline of all the lows at 1226 once more. We are in FED week and the dollar index has very low sentiment so we should be prepared for a snap back rally in the dollar and a correction in gold if it happens. This will not change the long term picture but delays the immediate rally to higher levels. In fact if we do fall that far I would be open even to my April view that we can test the trendline of the bottoms formed since 2015 at 1164 one last time. A close below 1263 would be a starting point

Copper And Gold

Copper and Gold have been having an awkward relationship for a while. While most commodities move in the same direction with a lead lag, these two have lagged to the extent that it is looking like an inverse relationship. So while both are up over two years they do so in alternation. The chart should speak for itself. So with Copper breakout last week gold sold off and I wonder if that is a trend for now. The reason for this inversion could simply be the way inflation and bond yields have been swaying causing Real interest rates to swing both ways. That has a rather direct impact on this asset class. Falling real interest rates are bullish for gold and they rise on economic demand expansion.

Zinc MCX

No respite yet for most base metals. So after the recent bounce in Zinc from the 155 level that I anticipated are we in an up trend. I am forced to check hourly charts and the recent rise appears 3 waves and done so this means there is risk of breaking below the 155 mark

Then if I draw a wider channel around prices it can go down to 148 next.

Lead MCX

Lead MCX broke its swing low. Here each correction leg is equal in size so if the last one Z is also equal we can go down to 128.

Silver MCX

Considering an alternate scenario for Silver if it continues to weaken as it closed below the averages yesterday. What this suggests is that the larger correction in Silver is still going on and we will retrace 78.6% of the 2016 rally if C=A is achieved. This is in the range of 15.30-15.20$.

In MCX terms it will mean a retest of 36000 at the lower end of the one year falling channel

 

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and international clients. Views expressed in this article are purely of the author – Mr Rohit Srivastava – a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

 

 

 

Adam Smith Associates At UK Trade & Export Finance Conference 2017

Its a proud moment and a great pleasure for Adam Smith Associates Pvt Ltd for being invited as a speaker at UK Trade & Export Finance Conference scheduled on June 15 2017.

Mr Rudra Kundu, Managing Director – Adam Smith Associates will be speaking on “Maintaining competitive edge in London’s role as a financial centre” and “New entrants: Attracting institutional investors into the supply chain”.

Adam Smith Associates Pvt Ltd is a leading one stop shop offering offering end to end trade finance solutions to its domestic and international clients with variety of services.

The UK’s leading gathering of trade and export finance professionals, business heads and trade experts will take place at Grange Tower Bridge, London on June 15.

Some of the services offered by Adam Smith Associates to its corporate clients covers

Inland Trade Finance
• Discounting of bills under LCs
• Discounting of bills accepted by large corporates
• Discounting of bills under co-acceptances of banks

Import Trade
• Buyers credit
• Suppliers credit
• ECAs
• High seas Sale & Purchase

Exports
• Post shipment discounting under LCs of various tenures. We specialize in difficult countries and difficult bank risk distribution.
• Financing using lines of various Exim banks
• Post shipment finance of export receivable without LC (open account trades)

Other Trade Related Services
• Market information
• Strategies for Counter Trade

Commodities / Warehouse Financing
Devising Risk Mitigation Strategies

Adam Smith Associates Pvt Ltd provides following services to banks:
Advisory on trade finance transactions including but not limited to matters under UCP.
Refinancing especially post shipment export portfolios of banks.
Using innovative trade finance structures to tackle bad loan portfolio of banks.
Sell down and forfeiting of bank risks pertaining to trade and commodity finance deals.
Providing support in the correspondent banking and FI work to offshore banks.
Creating bulk liquidity and FX solutions.

Some of our structured trade finance and other specialized services are:
Adding financial profits to trades for large commodity companies.
Trade dispute resolution.
Escrow services.
Transaction services for SPVs.
Using our existing commodity flows for corporate funding.
Interest arbitrage deals.
Trade backed FX treasury products.
Long term receivable finance.
Project export finance.
Funding against various trade finance instruments backed by legitimate trade flows.

Visit www.adamsmith.tv for more details

Trade and Commodity Finance News Trend Around the World

 ICC Banking Commission launches working group on digitalisation of trade finance
The ICC Banking Commission has launched a working group to coordinate all work relating to the digitalisation of trade finance. The group aims to help the trade finance industry accelerate its progress towards greater digitalisation.

The trade finance industry is undergoing a massive transformation – from time-consuming and cumbersome manual processes involving paper-based instruments such as Letters of Credit to an automated and digitised future.

Source: https://iccwbo.org/media-wall/news-speeches/icc-banking-commission-launches-working-group-digitalisation-trade-finance/

Maersk ventures into trade finance
To make overseas exports easier for Indian companies, especially SMEs, Denmark-based AP Moller – Maersk, one of the largest container shipping companies globally, has set up a new business vertical, Maersk Trade Finance.

In a nutshell, Maersk Trade Finance is a digital platform with pre-shipment and post shipment credit facilities. It enables exporters – manufacturers or traders – to not only get the cargo shipping services online but also apply for funds that can be used either to pay for the shipment or to invest in new orders

Source: http://www.thehindubusinessline.com/economy/logistics/maersk/article9717910.ece

International Chamber of Commerce calls for UN action to address S$1.6 trillion trade finance gap in SMEs globally
The International Chamber of Commerce (ICC) has called for action from United Nations to address the US$1.6 trillion trade finance gap in the Small and Medium Enterprise (SME) sector globally.

Highlighting that short-term financing is an essential tool to support small business growth and sustainability, ICC said yet a growing trade finance shortfall hurts companies and countries that need it the most.

World trade relies heavily on reliable sources of financing—both long-term (for capital investments) and short-term. The latter—commonly referred to as “trade finance”—is the basis on which a significant proportion of world trade operates.

Source: http://knnindia.co.in/news/newsdetails/global/international-chamber-of-commerce-calls-for-un-action-to-address-s16-trillion-trade-finance-gap-in-smes-globally

Belarusbank seals deal with EDB on $40m loan for trade financing
The Eurasian Development Bank (EDB) and ASB Belarusbank signed an agreement on financing foreign trade operations of Belarusbank clients in the EDB member states, BelTA learned from the EDB official website. The relevant agreement was signed by EDB Managing Director for Assets and Liabilities Dmitry Ladikov-Royev and ASB Belarusbank Executive Director Viktor Perepelitsa, the post on the website reads.

http://eng.belta.by/economics/view/belarusbank-seals-deal-with-edb-on-40m-loan-for-trade-financing-102073-2017/

Chinese Banks Pained By Shifting Position In Global Trade Finance
China’s corporate banking sector is getting hit with a bit of a setback as more companies look outside China for supply chain financing.

New research from East and Partners, released this week, discovered that CFOs the world over are changing their supply  chain financing practices as they plan to reduce the number of banks from which they access this type of financing. Currently, companies surveyed use an average of 14 supply chain financing banks, researchers said.

Source: http://www.pymnts.com/news/2017/china-corporate-banking-supply-chain-trade-finance/

ADB seals first trade finance deal in Fiji
The Asian Development Bank (ADB) has signed its first trade finance deals in Fiji, with two agreements with the Home Finance Company (HFC Bank).

A revolving credit facility and a credit guarantee facility are worth a combined US$4mn and will help HFC support local exporters in key areas such as sugar, copra and other agricultural goods.

http://www.gtreview.com/news/asia/adb-seals-first-trade-finance-deal-in-fiji/

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and international clients. Views expressed in this article are purely of the author – Mr Rohit Srivastava – a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

 

 

Commodity, Dollar, US 10 Years Treasury Notes and Currency – Technical Analysis

US 10 Years T Notes

No change here – the rising 10 year notes, meaning lower US yields continue to indicate the short term risk off mode of US markets.

CRB Index

Simple progression for the CRB index – 5 waves up and then a 61.8% retracement. Next wave iii up should start.

USDCNY

I have flipped from expecting a smaller degree 4th wave or larger degree 4th wave on this contract. This week break of the rising channel from the 2015 low should mean that it is a larger degree wave 4. EWI thinks the larger 3 wave rise is A-B-C, but I keeping the fall a 4th wave till the 23.6% retracement mark near 6.75. Will wave 4 end in A-B-C as shown or continue to form a triangle over many months? We will see. Below 6.75 it would be better to consider more bearish options on the USDCNY.

US Dollar Index

The US dollar index made a new low as it starts wave v of 3 down towards 95. The falling dollar is gathering momentum against all odds. The sentiment that was an extreme 5% bullish went back to 14% based on the Daily Sentiment index. The pace of the fall might accelerate from here once 96.50 breaks. We should be open to targets overshooting quickly as well. In fact if any this one macro trend could end up being the reason that the RBI actually cuts interest rates this week. To keep the rupee from getting too strong. Will be interesting to see what they do and why this week given the mix of diverging factors at work.

Euro

Reviewing the Monthly charts today as we ended the Month yesterday. The Euro closed well above the 20 month average of 1.094 which is now a major support or pivot for the trend. This after 2 positive divergences in the RSI indicator between 2015-2016. The next hurdle is the 40 month average near 1.15.

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and international clients. Views expressed in this article are purely of the author – Mr Rohit Srivastava – a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

Amazon – Dont You Dare This

Don’t You Dare this Amazon – but I would not have looked at the chart if it was not all over the news for the new record in price. Now if something is being watched so closely that it does not get missed by all the media it must carry a lot of emotion with it. The chart from the 2015 low marks as a 5 wave rise, where 3<1, and so 5<1 must also be true. The move up yesterday kissed the trendline from the wave 1 and 3 tops. So is wave 5 over. The weekly chart shows us to be in wave v of 5, so this is the final wave in the structure so far. So watch the next turn lower in Amazon closely as it can mark the end of a 5 wave rise and a correction. But that has not yet happened but we could be close.

 

Even on a Quarterly chart from 2001 it can look like this. Wave 5 of 5 up in progress.

 

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and international clients. Views expressed in this article are purely of the author – Mr Rohit Srivastava – a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

 

Commodity – Technical Analysis

Rough Rice CBT

International prices of Rice are due to start higher. Now I have said that for 2 years. Prices did not fall below the 9$ mark much but spent this time forming an ending triangle in wave Z that is the last phase of a consolidation long term. So now that prices have broken out of the wedge we should be well on our way into a third wave for Rice that should eventually go past the wave 1 peak of 24$. The breakout from the trendline is above 13$.

 

Cocoa CSCE

Cocoa prices have bottomed near the 1880 mark twice before and moved up by nearly 70%. So with the daily RSI showing positive divergences, the monthly RSI developing a possible positive divergence [closing tonight], and from the oversold territory as seen below, chances are we have a bottom in Cocoa longer term. Recently we made a higher bottom in the short term prices move as the first sign of a trend. Cocoa the key ingredient to Chocolate is going to move up again. It could be the start of a 3rd wave for the Long term so this time it may even go higher

US Steel

I have used the US Steel chart many times [even before the launch of the new site], to state my view on the metals sector. So In Feb of 2016 for the first time I published it here showing the completion of 5 waves down in wave C and thus a bottom in the metals sector. This was against everyday falling metals stocks back home. So more recently we have not seen a big correction in domestic metals stocks even as metal prices have corrected. The US Steel chart shows that the stock went from 6$ to 40$ in what maybe only wave 1 or A of a larger advance. We have seen a correction to 66% retracement in wave 2 or C down. What should then follow is wave 3 or C up next. C=A goes as far as 120. The rising channel below has room till 70$. And we recently bottom near 18.55. Till we hold these lows and this key retracement mark the trend for the metals should again be up. This should be important.

Sugar NCDEX

Local Sugar prices have not fallen yet along with global prices. A parallel line for wave B puts the resistance at 3900. Till we are below it we should still anticipate wave C down. The channel support is at 3625 below which wave 4 of lower degree is at 3350. And if the fall is deeper then 61.8% of the entire sugar rally is at 2775

NCDEX Future Index

The NCDEX Future index closed the month near the 40 month average. After a 5th wave it should go still lower in the months ahead back to the wave 4 area near 2119, from 2807 currently. So no early bottom in Indian Agro prices yet.

Copper

Commodities have been mixed. Copper below appears stable. So do lead and Aluminium. Nickel still keeps falling and Zinc is seeing deep retracements. Copper is holding the 20dma and the daily momentum remains in buy mode so it is giving positive signs. 2.54 is the 20dma as the support and unless we close below that the next move higher should unfold.

Gold

Gold broke out of a tight range seen for the last two weeks. On weekly charts however this was the 4th positive week. We are in a larger 3rd wave up that has the implications of going past the 1295 mark all the way to 3=1 near 1400$ in this move.

Crude

Crude stopped at the 61.8% mark for the day. Now we need to see if 46.7 holds as a support and if it does then we are heading towards c=a near 55.50, and if it overshoots then the trendline of all the highs for the last two years is at 58.50

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and international clients. Views expressed in this article are purely of the author – Mr Rohit Srivastava – a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd

Technical Analysis On Karachi & Sri Lanka Markets

I do not invest in Karachi but was clear that the neighboring market was going to beat the Nifty. Now it is also important from a geopolitical angle. Do not expect escalation of border problems during a bull market. Frankly they do not care and do not have time for this. Not in the near future ie the next six months because wave 5 is still extending and should touche the upper end of the rising channel since 2009 before it is done. Maybe even a throw over the line. 66000-70000 remains on the cards. This is a quarterly chart.

Sri Lanka

Sri Lanka is in a long term 4th wave consolidation that might eventually transform into a 4th wave. So far wave C was 61.8% of wave B. Wave D can test the upper line at 7610 and wave E the lower line near 6261. After that a 5th wave bull market will follow.

 

Adam Smith Associates offers trade & commodity finance related services & solutions to its domestic and international clients. Views expressed in this article are purely of the author – Mr Rohit Srivastava – a leading technical analyst. Visit www.adamsmith.tv for services offered by Adam Smith Associates Pvt Ltd