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Comments of the Day
22 December 2020
Video commentary for December 21st 2020
Eoin Treacy’s view
A link to today’s video commentary is posted in the Subscriber’s Area.
Some of the topics discussed include: Wall reliant on a weak Dollar, gold volatile, many assets recoup earlier losses, China steady but under pressure from a focus on politics over economics, coal, lumber, soybeans firm.
U.K. Faces Food Crisis Threat as Virus Surge Blocks Trade
This article from Bloomberg may be of interest to subscribers. Here is a section:
The U.K. confronted threats of food insecurity and panicked shopping days before Christmas as European nations restricted trade and travel to guard against a resurgent coronavirus, offering Britain a preview of the border chaos to come in the absence of a Brexit deal.
Fearing a fast-spreading new strain of the virus that forced a strict lockdown across England, France on Sunday suspended travel from the U.K. for 48 hours and wants a stricter testing regime before lifting the blockade. Germany and Italy halted arriving flights from Britain with Spain and Portugal following suit. The crisis gave renewed urgency to negotiations for a trade deal with the European Union that remained at a critical stage after weekend talks.
Late Sunday, the Port of Dover stopped freight moved by truck into France while allowing unaccompanied cargo to keep moving. Traffic into the U.K. is unaffected, though truckers often run supplies in both directions and the latest outbreak in the heart of England may discourage them from entering the island.
Eoin Treacy’s view
The announcement over the weekend that one of the evolved versions of the original COVID–19 virus has travelled from South Africa to the UK has caused a panicky response from European governments. The new variant appears to be more infectious but no more lethal than the last. That suggests it will quickly become the dominant form of the virus circulating the global before long. Since the newer version is now already in Italy, closing borders with the UK is unlikely to have any effect on its ability to spread inside the EU.
‘Politics come first’ as ban on Australian coal worsens China’s power cuts
This article from the Financial Times may be of interest to subscribers. Here is a section:
Yiwu, a city in eastern China known for making products such as flags and badges, has not only switched off all its street lights during the evening but has forced factories to cut working hours by up to 80 per cent until the end of this year.
“We are not living a normal life when our factory can only work two days a week and the streets are dark at night,” said Mike Li, owner of a plastic flower factory in Yiwu.
Chinese authorities have blamed these problems on a combination of an unusually cold winter in parts of the country and high energy demand.
Power plants, however, said their operation had also suffered from the suspension of Australian coal imports.
Official data show Chinese plants obtained about 3 per cent of their thermal coal from Australia last year. The ratio, said an official at trade association the China Electricity Council, could exceed 10 per cent in more developed provinces that are drawn to the high quality of Australian coal.
“The import ban doesn’t make economic sense,” said the official.
Eoin Treacy’s view
Christmas is not a holiday in China but Chinese New Year is. Therefore, December is the time when orders are placed for delivery in January because nothing tends to get done over the two-week Spring Festival break. The slowdown in manufacturing capacity across many of China’s major industrial areas is likely to have a knock-on effect of delivery timelines towards the end of the quarter. That suggests inflationary pressures will mount as a result of this trend of putting politics ahead of the economy.
Email of the day – on filling the gap
Hi Eoin – re the Chart Seminar, which I haven’t done for nearly 40 years!! – can you remind us/me the significance of filling the gap (down) – see, for instance, latest movement on CDE US Equity. Thanks and Happy Christmas.
Eoin Treacy’s view
Thank you for your patronage over the decades. Gaps in the market come in a variety of forms such as breakaway, trend extensions, exhaustion gaps and island reversals. The one thing they all share is a dynamic move outside of market hours.
Eoin’s personal portfolio: stock market trading position opened December 18th
Eoin Treacy’s view
One of the most commonly asked questions by subscribers is how to find details of my open traders. In an effort to make it easier I will simply repost the latest summary daily until there is a change.
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