Tuesday, February 23, 2016

Tue. Feb. 23 2016 #Uganda shilling and global market report

The Uganda shilling closed at 3407 on the US dollar, 4778 on the British pound, 3755 on the Euro, 33.46 on the Kenyan shilling and 2470 on the Canadian dollar.  I really like the stability of the shilling recently.  Given the turmoil in Uganda, I thought that it would have dropped like a hot potato but it has not dropped and is recovering rather nicely.
Coffee Arabica closed at $3.07 per kilo.
Coffee Robusta closed at $1.63 per kilo.
Coffee is not a commodity that moves aggressively but it is one of the biggest exports from Uganda.
Gold recovered $14.39 but it had fallen quite a bit and likely due to profit taking and stability in the markets.  It ended at $1222 per ounce.
Brent crude oil droped $1.64 a barrel.  This thing closed under the 50 day moving average (the blue line) and this means bad news because it is going down.  It had closed above the 50 MA yesterday.
The news on oil today was interesting and you should read this CNBC article.  I had not gotten the memo that Iran had started to put out 500,000 barrels daily on the market.  But oh yes, Iran is doing it.
The deal that OPEC is discussing to cut back supply to up the prices is not going to work very well because Iran is a giant for this organisation and Iran coming out of sanctions is dumping what they had in storage.  Then they will pump more from their wells.  Experts say Iran will push out up to 1 million barrels daily.
Meanwhile USA which is a large producer is going to be reducing production but Iran will eat it all up.  So good luck on Oil.  The CNBC article also says that companies hope to return to $80 a barrel by 2020.  Remember the Total CEO had said last year that they did not expect much recovery in 2016 but hoped to break even in 2017 at $60 a barrel.
Now we hear $80 in 2020.  Oh dear Uganda, how is your oil doing now?  Brent crude oil closed at $32.96 a barrel today and you can get the chart yourself using the symbol $Brent.  http://www.cnbc.com/oil/
Shanghai fell 24 points.  The chart shows that the steam has run out and it will fall some more this week.  The $SSEC has been stable for the last 10 trading days so this minor pull back might be just a fake out. It is still well under its 50 moving average though and normally, trading in anything which has no support but only resistance is a bad idea.
Hong Kong did not move much at all.  It closed at the same level as yesterday.  It is still sitting under its 50 day moving average and this is a caution as the $HKDOW still has resistance way above the current level.
Tokyo lost 59 points.  This $NIKK can drop some 900 points in one trading day so this was very minor.  However, it is still trading well under its 50 day moving average and that blue line will push it down.
Frankfurt lost 157 points and the chart is indecisive.  Intuition tells me that the $DAC will curve downwards.  It is also well under its 50 day moving average.
Paris lost 60 points in synch with Frankfurt.  The $CAC is trading under its 50 day moving average and the chart shows that it may continue to move up.  Today may have been profit taking and not even that much of it at all.  It is approaching the 50 day moving average so pull backs are expected but this was not drastic at all.
London lost 75 points.  This is the chart of the day.  It dropped pretty good then stopped at the 50 day moving average (the blue line) which is the support it has.  Support and resistance levels work well with the candle sticks.  Sure, this drop is completely normal given how much the $FTSE had risen and the 50 MA supported the fall.  We still have 4 beautiful white candles from last week and they will hold up any more fall.  London bridge does not need any repair at the moment.  In any case, there is the BREX so that is a factor to watch.  Britain exit or remain in EU!
North America:
Toronto lost 82 points but the $TSX is well above its 50 day moving average. This is awesome.
Dow Jones Industrical Average lost 189 points closing well under the 50 day moving average.  In fact the $INDU plain backed down from that blue line.
Standard and Poor lost 24 points and also backed down from the 50 day moving average.  We were so close but the moving averages can be very powerful resistance lines to break through.  So the $SPX is going down and this means that the other indices will also come down.  Well, the DOW did it so prepare for a rough ride for a bit.
NASDAQ lost 67 points and closed yesterday’s gap up.  Given that it catches pneumonia when the Dow and the S&P sneeze, this one too is going down.  In any case, it is still closing at well below its moving average and any rise from this point will be nothing short of a “fake out”.
On global news, we have the “Saudi oil minister Naimi: Oil production cuts won’t happen”.  This is interesting since I suppose that they all want to maintain their markets.  Did you know that Saudi Arabia’s cost per barrel is under $9 a barrel.  Then other companies need $30 – $60 to break even.  No wonder Saudi is not moving an inch.  http://www.cnbc.com/2016/02/23/al-naimi-we-in-oil-industry-have-more-that-unites-than-divides-us.html
Martha Leah Nangalama
Moncton, Canada

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