Predicted the Dow's peak; the subsequent drop originating in Germany is also explained — Mr. Tetsuo Inoue

Mr. Tetsuo Inoue's October 16 articleDow RSI total rose to 133.71, with a high probability of topping within the coming weekand it has been highly accurate in predicting the Dow's top.

We will provide the full content and today's analysis of the Germany-originated plunge completely free of charge.

潮流1148　テクニカル的に米株が上昇できない時間帯。リスクオフに注意1

Delivery date: 2020/10/26 09:17

Last Friday, I wrote that our monitoring of the original technical indicator, the “Dow's RSI total” (the sum of RSI 14-day 5-day and 10-day moving averages) had topped and entered a phase where it could not rise sharply, but last week the Dow posted a weekly decline for the first time in four weeks.

Two weeks ago Friday article

Delivery date: 2020/10/16 07:56201016　Dow RSI total rose to 133.71, high likelihood of topping within the next weekToday, as written in “Sign,” the probability that the Dow RSI will top next week has increased, so I am attaching the RSI total graphs for the Dow and the Nikkei average.ーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーOf course, the current market theme in the United States is not only the added economic stimulus, but the risk-off dynamics that continue even after passing the October 1 cliff (the end of the period when U.S. airlines were refraining from further staffing cuts following the spring COVID-19 package). On Friday, all three indices opened higher slightly, but Kudlow, head of the NEC, said “stimulus negotiations are not moving much at this time,” while Pelosi, the House Speaker, said, “If the President supports it, the stimulus bill could pass before November 3,” delivering a hopeful message to the market; however, when Mnuchin commented that “Pelosi is very stubborn and there is a substantial gap toward an agreement,” stocks fell and bonds rose, with the 10-year yield hitting an intraday low of 0.829%. This Democratic Speaker Pelosi, in a CNN interview, spoke not only about additional measures but even about her own future. She stated that, “If Democrats maintain the majority, I intend to remain as Speaker.” At 80 years old, she is still motivated.Looking at the market from the latter half of last week, one thing that concerns me is risk-off moves in somewhat speculative, small markets.Last Thursday’s plunge in the Mothers futures, and yesterday, though it was a holiday, Bitcoin’s drop (rising to ¥1,398,000 before falling to around ¥1,353,000) represents a typical movement. While Bitcoin moves could reflect profit-taking after PayPal’s entry into the business, there is a growing concern that risk-off moves are surfacing beneath the surface, including in emerging-market currencies.The drivers are regional—mostly the United States and Europe. In the U.S., the key questions are whether additional fiscal stimulus will be implemented soon, and even after the presidential election, both sides may not concede defeat, leading to a political stalemate and a protracted period without a final outcome into the new year. In Europe, the issues are another round of lockdowns, continued difficulties in Brexit negotiations with the UK (tariffs, etc.), and Turkey’s renewed volatility. I plan to explain these, but this week I will also focus on U.S. corporate earnings.Last week Intel’s results highlighted a pronounced slowdown in the data-center segment, with some analysts calling it “despairing.” Its shares fell sharply by 10.58% on Friday, but this week is GAFA and GAFAM week.Among events likely to impact the market, here are the highlights:27th: Caterpillar, Pfizer, Advanced Micro Devices (AMD), Microsoft28th: General Electric (GE), Boeing, Gilead Sciences, Amgen, Visa, Ford Motor29th: Alphabet, Apple, Twitter, Amazon.com, Facebook潮流1149　ドイツ発の急落、SAPがADRで記録的な下げ　連載2Delivery date: 2020/10/27 09:31Yesterday I started the series “Technically, US stocks cannot rise in certain time windows. Watch for risk-off.” Since the development has already occurred, I will change the title daily, but the series will continue.Yesterday, as a risk-off factor, I lightly noted concerns in both the United States and Europe; the essence, however, lies not in those two regions per se, but in areas outside China where COVID containment has not been as successful. The sequence of events includes dramatic Q2 GDP declines, followed by a misleadingly large rebound in Q3 (July–September) that lacks credibility, and concerns about what lies ahead beyond Q4 into 2021.Until now, risk-off moves have occurred in markets that are not main streams, such as Japan's Mothers index and Bitcoin on Sunday; currency depreciation in Argentina, South Africa, and Turkey; and energy prices that seemed ready to fall at any moment. Last night, however, a small stone began rolling at Germany’s summit, and its effects spread to the United States, eventually affecting major indices. The concerns I wrote yesterday have come true.The trigger stone was SAP, Germany’s world-renowned business software maker.It reported its third quarter for the year 2020, but the full-year revenue outlook, not IFRS-compliant, was revised downward from April. It said the COVID-19 outbreak has placed the business in a difficult environment, and that demand for corporate travel expense processing and financial settlement processing is not expected to recover within this year.In response, Germany’s DAX fell 3.70%, the largest drop since September 21’s 4.37%, but what surprised me was how SAP’s ADR traded in the U.S.—closing at $115.02, down 23.15% from the previous day. This drop far exceeds the 13.07% drop seen in October 2008 during the Lehman shock’s rebound-and-fall sequence.However, if we look calmly at the numbers, SAP’s full-year revenue outlook excluding currency effects was previously €27.8–€28.5 billion and the revised figure is €27.2–€27.8 billion. It is not a downward revision of the kind that would warrant this level of uproar.The reasons seem to include that pre-release market expectations were around €33.2 billion, and the surge in new COVID-19 infections and the responses by various countries were heavily reported in the news, contributing to the reaction.Spain declared a state of emergency again on the 25th, Italy decided to close cinemas and theatres from the 26th, and in the United States CNBC reported that the seven-day average of new infections reached a record high of 68,767, with Johns Hopkins University’s tally quietly indicating over 80,000 on the 23rd—surpassing July’s level and marking a record high.As a result, stocks that had fallen sharply in the spring due to the coronavirus faced renewed selling, and Carnival, the leading U.S. cruise line that had been "doing nothing wrong today," was hit by selling pressure that intensified on Thursday and Friday, falling 8.65% to close at $14.03.The market then sought bad news, and on the 23rd IHS Markit reported that the euro-area October PMI fell below the 50 threshold for the first time in four months, reigniting concerns about what lies beyond the 10–12 quarter period.Yesterday, Tokyo Stock Exchange First Section turnover was ¥15.929 trillion, the fourth smallest of the year and below the ¥16 trillion mark since August 24. Since September, even though U.S. markets have declined, Japan’s market has endured with “small turnover (no panic selling).” Today’s outcome will be important for gauging whether other markets will be pulled into risk-off in the future.

201016　Dow RSI total rose to 133.71, high likelihood of topping within the next week

Today, as written in “Sign,” the probability that the Dow RSI will top next week has increased, so I am attaching the RSI total graphs for the Dow and the Nikkei average.ーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーOf course, the current market theme in the United States is not only the added economic stimulus, but the risk-off dynamics that continue even after passing the October 1 cliff (the end of the period when U.S. airlines were refraining from further staffing cuts following the spring COVID-19 package). On Friday, all three indices opened higher slightly, but Kudlow, head of the NEC, said “stimulus negotiations are not moving much at this time,” while Pelosi, the House Speaker, said, “If the President supports it, the stimulus bill could pass before November 3,” delivering a hopeful message to the market; however, when Mnuchin commented that “Pelosi is very stubborn and there is a substantial gap toward an agreement,” stocks fell and bonds rose, with the 10-year yield hitting an intraday low of 0.829%. This Democratic Speaker Pelosi, in a CNN interview, spoke not only about additional measures but even about her own future. She stated that, “If Democrats maintain the majority, I intend to remain as Speaker.” At 80 years old, she is still motivated.Looking at the market from the latter half of last week, one thing that concerns me is risk-off moves in somewhat speculative, small markets.Last Thursday’s plunge in the Mothers futures, and yesterday, though it was a holiday, Bitcoin’s drop (rising to ¥1,398,000 before falling to around ¥1,353,000) represents a typical movement. While Bitcoin moves could reflect profit-taking after PayPal’s entry into the business, there is a growing concern that risk-off moves are surfacing beneath the surface, including in emerging-market currencies.The drivers are regional—mostly the United States and Europe. In the U.S., the key questions are whether additional fiscal stimulus will be implemented soon, and even after the presidential election, both sides may not concede defeat, leading to a political stalemate and a protracted period without a final outcome into the new year. In Europe, the issues are another round of lockdowns, continued difficulties in Brexit negotiations with the UK (tariffs, etc.), and Turkey’s renewed volatility. I plan to explain these, but this week I will also focus on U.S. corporate earnings.Last week Intel’s results highlighted a pronounced slowdown in the data-center segment, with some analysts calling it “despairing.” Its shares fell sharply by 10.58% on Friday, but this week is GAFA and GAFAM week.Among events likely to impact the market, here are the highlights:27th: Caterpillar, Pfizer, Advanced Micro Devices (AMD), Microsoft28th: General Electric (GE), Boeing, Gilead Sciences, Amgen, Visa, Ford Motor29th: Alphabet, Apple, Twitter, Amazon.com, Facebook潮流1149　ドイツ発の急落、SAPがADRで記録的な下げ　連載2Delivery date: 2020/10/27 09:31Yesterday I started the series “Technically, US stocks cannot rise in certain time windows. Watch for risk-off.” Since the development has already occurred, I will change the title daily, but the series will continue.Yesterday, as a risk-off factor, I lightly noted concerns in both the United States and Europe; the essence, however, lies not in those two regions per se, but in areas outside China where COVID containment has not been as successful. The sequence of events includes dramatic Q2 GDP declines, followed by a misleadingly large rebound in Q3 (July–September) that lacks credibility, and concerns about what lies ahead beyond Q4 into 2021.Until now, risk-off moves have occurred in markets that are not main streams, such as Japan's Mothers index and Bitcoin on Sunday; currency depreciation in Argentina, South Africa, and Turkey; and energy prices that seemed ready to fall at any moment. Last night, however, a small stone began rolling at Germany’s summit, and its effects spread to the United States, eventually affecting major indices. The concerns I wrote yesterday have come true.The trigger stone was SAP, Germany’s world-renowned business software maker.It reported its third quarter for the year 2020, but the full-year revenue outlook, not IFRS-compliant, was revised downward from April. It said the COVID-19 outbreak has placed the business in a difficult environment, and that demand for corporate travel expense processing and financial settlement processing is not expected to recover within this year.In response, Germany’s DAX fell 3.70%, the largest drop since September 21’s 4.37%, but what surprised me was how SAP’s ADR traded in the U.S.—closing at $115.02, down 23.15% from the previous day. This drop far exceeds the 13.07% drop seen in October 2008 during the Lehman shock’s rebound-and-fall sequence.However, if we look calmly at the numbers, SAP’s full-year revenue outlook excluding currency effects was previously €27.8–€28.5 billion and the revised figure is €27.2–€27.8 billion. It is not a downward revision of the kind that would warrant this level of uproar.The reasons seem to include that pre-release market expectations were around €33.2 billion, and the surge in new COVID-19 infections and the responses by various countries were heavily reported in the news, contributing to the reaction.Spain declared a state of emergency again on the 25th, Italy decided to close cinemas and theatres from the 26th, and in the United States CNBC reported that the seven-day average of new infections reached a record high of 68,767, with Johns Hopkins University’s tally quietly indicating over 80,000 on the 23rd—surpassing July’s level and marking a record high.As a result, stocks that had fallen sharply in the spring due to the coronavirus faced renewed selling, and Carnival, the leading U.S. cruise line that had been "doing nothing wrong today," was hit by selling pressure that intensified on Thursday and Friday, falling 8.65% to close at $14.03.The market then sought bad news, and on the 23rd IHS Markit reported that the euro-area October PMI fell below the 50 threshold for the first time in four months, reigniting concerns about what lies beyond the 10–12 quarter period.Yesterday, Tokyo Stock Exchange First Section turnover was ¥15.929 trillion, the fourth smallest of the year and below the ¥16 trillion mark since August 24. Since September, even though U.S. markets have declined, Japan’s market has endured with “small turnover (no panic selling).” Today’s outcome will be important for gauging whether other markets will be pulled into risk-off in the future.

ーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーーー

Of course, the current market theme in the United States is not only the added economic stimulus, but the risk-off dynamics that continue even after passing the October 1 cliff (the end of the period when U.S. airlines were refraining from further staffing cuts following the spring COVID-19 package). On Friday, all three indices opened higher slightly, but Kudlow, head of the NEC, said “stimulus negotiations are not moving much at this time,” while Pelosi, the House Speaker, said, “If the President supports it, the stimulus bill could pass before November 3,” delivering a hopeful message to the market; however, when Mnuchin commented that “Pelosi is very stubborn and there is a substantial gap toward an agreement,” stocks fell and bonds rose, with the 10-year yield hitting an intraday low of 0.829%.

This Democratic Speaker Pelosi, in a CNN interview, spoke not only about additional measures but even about her own future. She stated that, “If Democrats maintain the majority, I intend to remain as Speaker.” At 80 years old, she is still motivated.

Looking at the market from the latter half of last week, one thing that concerns me is risk-off moves in somewhat speculative, small markets.

Last Thursday’s plunge in the Mothers futures, and yesterday, though it was a holiday, Bitcoin’s drop (rising to ¥1,398,000 before falling to around ¥1,353,000) represents a typical movement. While Bitcoin moves could reflect profit-taking after PayPal’s entry into the business, there is a growing concern that risk-off moves are surfacing beneath the surface, including in emerging-market currencies.

The drivers are regional—mostly the United States and Europe. In the U.S., the key questions are whether additional fiscal stimulus will be implemented soon, and even after the presidential election, both sides may not concede defeat, leading to a political stalemate and a protracted period without a final outcome into the new year. In Europe, the issues are another round of lockdowns, continued difficulties in Brexit negotiations with the UK (tariffs, etc.), and Turkey’s renewed volatility. I plan to explain these, but this week I will also focus on U.S. corporate earnings.

Last week Intel’s results highlighted a pronounced slowdown in the data-center segment, with some analysts calling it “despairing.” Its shares fell sharply by 10.58% on Friday, but this week is GAFA and GAFAM week.

Among events likely to impact the market, here are the highlights:

27th: Caterpillar, Pfizer, Advanced Micro Devices (AMD), Microsoft

28th: General Electric (GE), Boeing, Gilead Sciences, Amgen, Visa, Ford Motor

29th: Alphabet, Apple, Twitter, Amazon.com, Facebook

潮流1149　ドイツ発の急落、SAPがADRで記録的な下げ　連載2

Delivery date: 2020/10/27 09:31

Yesterday I started the series “Technically, US stocks cannot rise in certain time windows. Watch for risk-off.” Since the development has already occurred, I will change the title daily, but the series will continue.

Yesterday, as a risk-off factor, I lightly noted concerns in both the United States and Europe; the essence, however, lies not in those two regions per se, but in areas outside China where COVID containment has not been as successful. The sequence of events includes dramatic Q2 GDP declines, followed by a misleadingly large rebound in Q3 (July–September) that lacks credibility, and concerns about what lies ahead beyond Q4 into 2021.

Until now, risk-off moves have occurred in markets that are not main streams, such as Japan's Mothers index and Bitcoin on Sunday; currency depreciation in Argentina, South Africa, and Turkey; and energy prices that seemed ready to fall at any moment. Last night, however, a small stone began rolling at Germany’s summit, and its effects spread to the United States, eventually affecting major indices. The concerns I wrote yesterday have come true.

The trigger stone was SAP, Germany’s world-renowned business software maker.

It reported its third quarter for the year 2020, but the full-year revenue outlook, not IFRS-compliant, was revised downward from April. It said the COVID-19 outbreak has placed the business in a difficult environment, and that demand for corporate travel expense processing and financial settlement processing is not expected to recover within this year.

In response, Germany’s DAX fell 3.70%, the largest drop since September 21’s 4.37%, but what surprised me was how SAP’s ADR traded in the U.S.—closing at $115.02, down 23.15% from the previous day. This drop far exceeds the 13.07% drop seen in October 2008 during the Lehman shock’s rebound-and-fall sequence.

However, if we look calmly at the numbers, SAP’s full-year revenue outlook excluding currency effects was previously €27.8–€28.5 billion and the revised figure is €27.2–€27.8 billion. It is not a downward revision of the kind that would warrant this level of uproar.

The reasons seem to include that pre-release market expectations were around €33.2 billion, and the surge in new COVID-19 infections and the responses by various countries were heavily reported in the news, contributing to the reaction.

Spain declared a state of emergency again on the 25th, Italy decided to close cinemas and theatres from the 26th, and in the United States CNBC reported that the seven-day average of new infections reached a record high of 68,767, with Johns Hopkins University’s tally quietly indicating over 80,000 on the 23rd—surpassing July’s level and marking a record high.

As a result, stocks that had fallen sharply in the spring due to the coronavirus faced renewed selling, and Carnival, the leading U.S. cruise line that had been "doing nothing wrong today," was hit by selling pressure that intensified on Thursday and Friday, falling 8.65% to close at $14.03.

The market then sought bad news, and on the 23rd IHS Markit reported that the euro-area October PMI fell below the 50 threshold for the first time in four months, reigniting concerns about what lies beyond the 10–12 quarter period.

Yesterday, Tokyo Stock Exchange First Section turnover was ¥15.929 trillion, the fourth smallest of the year and below the ¥16 trillion mark since August 24. Since September, even though U.S. markets have declined, Japan’s market has endured with “small turnover (no panic selling).” Today’s outcome will be important for gauging whether other markets will be pulled into risk-off in the future.