Published in


The Trend is Clear

Just stick to what works

Another day, another day of tech stocks powering ahead. While the Congress is trying to probe the tech giants for anti-trust issues, Trump wants Microsoft to buy the whole of TikTok from its Chinese parent, ByteDance.

The trend is clear, there is no need to be cute. Just stick to what works.


As of New York Close 3 Aug 2020,


  • Dollar was slightly higher against a basket of currencies on Monday as investors unwound some recent short positions following the currency’s weakest monthly performance in a decade (-4%). The weakness has been tied to market expectations for further easing of U.S. monetary policy and a lack of agreement among U.S. lawmakers on further fiscal stimulus. USDJPY continues to trade strongly hitting an intraday high of 106.46 before easing off. AUD tested below 0.7100 but recovered lost ground as the strongly positive risk sentiment from the stock market helped.
  • The U.S. ISM Manufacturing Index for July increased to 54.2% (consensus 53.4%) from 52.6% in June. This was the second straight month the index has been above 50.0% (the line between expansion and contraction) after cratering to a low of 41.5% in April (the lowest since April 2009). The key takeaway rests in the understanding that manufacturing conditions are rebounding from the abyss of three straight monthly contractions (March-May).
  • Nasdaq Composite (+1.5%), and Dow Jones Industrial Average (+0.9%) closed higher on Monday, as Apple (AAPL 435.75, +10.71, +2.5%) and Microsoft (MSFT 216.54, +11.53, +5.6%) plowed ahead with noticeable gains. It was another record close for the Nasdaq, while the Russell 2000 outperformed with a 1.8% gain. Microsoft rallied on news that it was continuing talks to acquire TikTok while Apple remained hot following its 10.5% earnings-driven gain from Friday.



The calls for increased government intervention came as U.S. lawmakers and the White House resumed talks on a new government relief package, including a possible extension of unemployment benefits that expired on Friday.

“The ball is in Congress’ court,” Chicago Fed President Charles Evans told reporters on a call. “Fiscal policy is fundamental to a better baseline outlook, to a stronger recovery and getting the unemployment rate down, people back to work safely, and ultimately reopening the schools safely.”

The regional bank presidents’ comments came just days after the Fed’s latest two-day policy meeting, at which officials repeated their pledge to do all in their power to help the economy weather the recession that began in February as the outbreak began ricocheting around the globe. The U.S. central bank has slashed interest rates to near zero — where they are expected to remain for years — and has rolled out roughly a dozen emergency programs to backstop financial markets and support businesses.

Thematic Context: “We can move very quickly with the Democrats on these issues. We’ve moved quickly before, and I see no reason why we can’t move quickly again,” Mnuchin said. “And if there are issues that take longer, we’ll deal with those as well.” — 27th July 2020

“ We believe Mnuchin, and this impasse is a movie we have seen before. A deal will come, or the markets will force it out of their hands. Any dips in the Nasdaq is a gift to be bought.” — 3rd Aug 2020


Samsung Electronics Co will halt operations of its last computer factory in China, the latest manufacturer to shift production from the world’s second-biggest economy.

It has built what it has described as the world’s largest mobile phone manufacturing plant on the outskirts of New Delhi, where it tests new devices and often assembles them for export. That manufacturing power, and Samsung’s ability to source many components internally, is helping it gain ground amid the pandemic. Chinese smartphone brands Xiaomi and Oppo suffered local production hiccups and product delays due to COVID-19, but Samsung was able to keep delivering phones smoothly.

Thematic Context: “India is the perfect counterweight to China in terms of size (almost equivalent) and demographics (superior demographic, largely young vs an aging Chinese population). Watch out for the Trump administration to throw its weight behind the situation and ramp up the rhetoric against China. In addition, India might be the beneficiary of the reshored supply chains out of China for the western world.

For India to be the perfect counterweight, it first needs a competitive economy that will enable it to build up and sustain a sufficiently competent military which can serve as a deterrent to China’s geopolitical agenda. India may see an economic renaissance funded by “Cheap Dollars” out of this situation, leading to the rise of another emerging market superpower.” — 8th June 2020


Poland’s Supreme Court on Monday upheld the results of President Andrzej Duda’s narrow victory in presidential elections last month, the country’s closest contest since the fall of communism in 1989, a decision that clears the path for the country’s conservative Law and Justice party to continue in power.

Thematic Context: ““To quote a snippet from the New York Times in 2019: “The intensity of the U.S.-Polish bilateral relationship cannot be underestimated.” The U.S-Poland alliance is solidifying and we foresee it to be the new “power relationship” for American diplomacy in Europe and the Baltics. Watchout for more U.S. FDI into Poland and for greenshoots in the once dormant Polish economy.” — 7th June 2020


  1. RBA
  • The Reserve Bank of Australia is set to stand pat again when it announces its latest policy decision later. As the Australian economy climbs out of its worst recession in decades, policymakers are not anticipated to feel the urge to act in July. However, with the country continuing to see an alarming surge in new coronavirus cases, it may only be a matter of time before additional monetary support becomes necessary. Any hints later that that’s where policy is headed could knock the wind out of the AUD’s rally.


  1. AUD correction continues and it’s finding some support at .7180 where it rebounded from. With the long term trend higher intact, dips away from that support should be used as opportunities to add.
  2. Gold & Silver started the week higher but eased off the highs as there’s likely to be profit-taking from short term speculators who got into the game recently. Consolidation will continue but the fundamentals will drive them to higher levels eventually.




Trading Tip (Click Pic for the full tip)

Want more analysis and trade ideas? Subscribe to the mailing list.



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store