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1. byEvening_tao/Freepik
News, Analysis, Trades – How to Connect the Dots
OneMarket Brief
AllIn
Ai1 Objective:
Read between the
lines and connect the
dots in a simple but
meaningful way
Ai1 Includes:
• News
• Analysis
• Trading Signals
Ai1 Format:
Cause, effect, trajectory
• What happened : Event
• Why it happened : Cause - analysis
• What will happen : Probability - trades
Pinchas Cohen is a consultant to companies, offering research analysis,
trading signals, live event coverage and market education. Cohen is Financial
MarketsAnalysts/ContributingAuthortoInvesting.com-wherehewritesThe
Week Ahead, Opening Bell and Chart of the Day – as well as for The Marker.
He is the Founding Chairman of the Israeli Chamber of Technical Analysts.

2. 05/07/2017
Sequence 1:
News Format - How it’s told
Causal Format - How it happened
Analysis:
Confirmation of investors’
rising risk appetite ahead of
Fed Minutes
Reaction:
Haven assets rise
temporarily but quickly
return to their prior declines
Event:
North Korea escalates threat
with intercontinental ballistic
missile launch
Effect:
Market structure rotates
out of tech into financials
and out of havens into risk
Cause:
Central banks convince
investors inflation will rise.
Trajectory:
Tech and havens will
continue to decline, as
financials will rise.
Sequence 2:
News Format - How it’s told
Causal Format - How it happened
Analysis:
Oil rallied within a
correction, which is likely to
have ended
Reaction:
Unknown yet
Event:
Oil weakens first time after
year’s longest 9-day straight
run
Effect:
Corrective Rally
Cause:
Oil’s biggest decline of the
year.
Trajectory:
Oil to continue main trend’s
decline toward $40.

3. 05/07/2017
Upcoming Events
• FOMC Minutes at 14:00 EDT is the focal point of a market recalibrating itself into a
reflationary rotation. While equity traders bought into the Fed’s outlook for a rising
inflation – buying stocks all the way into all-time highs - backed up by a quire of central
bankers around the world, about their own inflation, bond traders have been more
skeptical. They will look to the Minutes to see if a closer look in to the recent highlights
will confirm the Fed’s rosy picture, or whether thorns of descent might prick traders’
fingers.
• The Group of Twenty (G20) meets for 12th time on Friday in Hamburg, Germany,
where Trump will meet Putin and China’s Jinping. Each of these three events
happening individually potentially have a strong impact on the dollar and yields. All
three happening simultaneously is a potential triple market explosion.
• Economists expect the Nonfarm Payroll to reveal that 175,000 new jobs were created
in June and that wage growth increased as is consistent with a tightening employee
market. After the rise since October was broken and a decline started at February,
meeting the expectation will have been the first time the downtrend is broken.
With regards to Fed-sceptics, who don’t buy into its reflationary outlook, they are
concerned with the longer downtrend since June 2016.
US Nonfarm Payrolls

4. 05/07/2017
Breaking it Down
Commentary
The Fed, championed by Janet Yellen, has been working hard to convince investors that
inflation will rise. The Fed received last week a boost, when the ECB, BoJ and BoE have said
the same thing about their respective economies. Inflation will rise. While in Europe it is
already on the rise, everyone agreed the economy will grow. After the disappointment in
Trump’s reflation, investors were skeptical at first, but they have finally bought the Fed’s
outlook, as they have bought shares, driving them into record highs.
When an economy begins to rise, leading interest rates higher, the biggest beneficiaries are
banks, as their profits are derived from interest rates – at the expense of the former leader, the
tech sector. Last week’s overwhelming success in the Fed’s bank stress test, for the first time
since before the crash, was the marketing slogan the Fed needed to convince investors that
the economy is doing better than this year’s string of disappointing economic data led them
to believe.
Sequence 1:
Causal Format - How it happened
News Format - How it’s told
Analysis:
Confirmation of investors’
rising risk appetite ahead of
Fed Minutes
Reaction:
Haven assets rise
temporarily but quickly
return to their prior declines
Event:
North Korea escalates threat
with intercontinental ballistic
missile launch
Effect:
Market structure rotates
out of tech into financials
and out of havens into risk
Cause:
Central banks convince
investors inflation will rise.
Trajectory:
Financials will rise as tech
and havens will continue to
fall

5. 05/07/2017
Trades
S&P 500 Financials
Financial shares have been moving sideways. The current rally has stopped by the resistance
of the March peak, where investors still remember what happened at this price level. Today’s
Fed Minutes may make or break the range.
A close above 420 will mark the breakout. Beware of a bull trap, though, and consider
using a filter of a number of days and/or the price depth, depending on your risk aversion.
You might also wait for a likely pullback, after the first burst up. On the other hand, should
investors not like what they find in the Minutes, and the price confirms the resistance, some
traders might short back toward $380.
S&P Technology Sector

6. 05/07/2017
While financials have moved sideways, tech has rallied since December and the end of the
Trump trade .That rally has shown two signs of ending: (1) the price fell below the uptrend
and (2) it appears to have completed a reversal pattern. Although, it closed below the
pattern, suggestion its completeness, it might be a fake-out. While professional analysts and
traders wait for confirmation of the breakout, by using filters, mentioned in the financials’
commentary above, the Nasdaq 100 Tech already completed a much sharper reversal.
Nasdaq 100 Technology
The same head-and-shoulders pattern rushed through a half-baked right shoulder and broke
down, completing a clear series of peaks and troughs, the mark of a trend – in decline.
Considering Nasdaq’s tech heaviness, this might prove a leading indicator for the S&P 500
Financials. Of course, traders can also short the Nasdaq.
Havens
Japanese Yen
The yen overtook gold as a safe haven assets since Japan had had to sell assets overseas
to pay for debt. Repatriating the proceeds includes a purchase of the yen. This continuous
demand drove up the yen’s value.
Later, Japanese insurance companies were forced to foreign pastures for a positive yield in a
negative yield Japanese economy. They were concerned that when repatriating their earnings,
they’d be forced with paying more for a rising yen. They bought yen as a hedge, increasing its
demand. When investors seeking a haven and speculators seeking a quick profit recognize this
pattern, they too increased the demand for the currency. Finally, Japan’s current account surplus
ensures a continued demand for their currency by other countries importing Japanese goods.

7. 05/07/2017
USDJPY Daily Chart
Consistent with the reflationary rotation discussed above, investors are rotating out of safe
havens and into risk. The downtrend line of the pair has already been broken and the price
closed above the reversal line (red), completing the reversal pattern. However, there are often
bull traps in the form of fake outs – as in, not a true breakout – and pullbacks, as the bears
fight back and retest the support of the reversal line, before the trend resumes. Traders use
filters, discussed above, to avoid losses.
The pair first found the support of the 100 dma (red) and then bounced back to breakout of
the downtrend line, as well as the reversal line. The MACD supports the uptrend. Note that
while the May price peak was lower than the March Peak, the RSI registered a higher peak,
suggesting the price will soon follow its rising momentum.

8. 05/07/2017
Gold
Like with the yen, gold has broken its uptrend line and is about to break a Double Top reversal
line (red). Like the yen, it had crossed below the 200 dma (red), and like the yen it produced
a negative divergence (Above it’s written as a “positive” divergence, as it relates to the dollar,
against the yen) when the RSI’s second peak was lower than the first peak, while the price
action’s June peak was higher than the April peak. The MACD is within a downward formation
but is reaching the oversold territory, suggesting a correction may precede the downside
breakout.
Trading Strategies
Professional traders wait for a close on a decisive breakout before shorting. See above for
ways to avoid losses in case of a whipsaw.
Risk-On Confirmation
The oldest stock market indicator provided a buy signal on June 3. Develop by Charles H.
Dow, the creator of the Dow Jones indexes and co-founder of the Wall Street Journal, the
“Dow Theory” that states that the Transportation Index must confirm the Industrial Index. If
business is going up, the transportation of its goods should also go up – and vice versa.

9. 05/07/2017
When the Transportation index (purple) crossed over its highest March peak (red line) it
confirmed the rising Industrial index, providing the Dow Theory buy signal. This is consistent
with investors selling off havens, in search of growth.
Sequence 2:
Causal Format - How it happened
News Format - How it’s told
Analysis:
Oil rallied within a
correction, which is likely to
have ended
Reaction:
Unknown yet
Event:
Oil weakens first time after
year’s longest 9-day straight
run
Effect:
Corrective Rally
Cause:
Oil’s biggest decline of the
year
Trajectory:
Oil to continue main trend’s
decline toward $40.

10. 05/07/2017
Oil Daily Chart
Oil’s Cuddly Bear Rally About to Turn Ugly
Irony is when the opposite of what you’d expect would happen, often with amusing results.
However, oil’s best rally of the year caught traders by surprise, and not the good kind, after
the media hype of officially becoming a bear market. We forecast the plunge in multiple posts
since over a month, and we also forecast the correction. At the risk of charming, we provide a
third forecast of the end of the correction and the retesting of the June 21 $42 trough, and an
expected decline to $40.
Fundamental Argument
UBS – Oil Will Continue to Climb
UBS analyst Giovanni Staunovo forecasts a 20-percent rally by yearend. He argues that
market sentiment is overly negative, which means he expects investors to overcome their
unwarranted pessimism at some point and increase demand. His main reason, however, is
that he believes that supply will be cut, because of OPEC’s, NOPEC’s pledge to do “whatever it
takes” to reign in supply. Staunovo believes that the oil producers’ deal is beginning to show,
as the IEA reported that demand outpaced supply in the second quarter, and that should
accelerate in the second half of the year, till the oil market actually rebalances.

11. 05/07/2017
US (Not USA) – Oil Will Decline
First, how can Giovanni think that oil investors have become too negative, right after they just
bought it by the fistful in the year’s longest rally, driving up prices by $10, parring half of the
year’s worst decline?
Second, how can he rely on OPEC & Friends to “whatever it takes,” after Saudi Arabia itself just
violated that pledge in May, shooting down the Russian efforts to include an option to extend
the deal in 3 months, as well as disappointing investors with lowballing the cuts. There isn’t an
expert who wasn’t surprised at the compliance of OPEC members, but the expectation of the
members to violate the agreement is because they have always done so. That’s the trend. The
current compliance is the anomaly, the correction. If OPEC is willing to do “whatever it takes,”
why didn’t they implement into the deal that they would deepen cuts whenever necessary to
offset the rising production of Nigeria and Libya – two members exempt from the deal? How
long will other members, who have historically always violated deals, sit on the sidelines,
while Nigeria and Libya take advantage of their competitors holding themselves back?
Third, Giovanni sees the first signs of OPEC’s cuts, because the IEA reported that in the
second quarter demand outpaced supply, and it will rebalance by the second half of this year?
How, then, does he explain that the prices have plunged much lower than before the deal,
rendering it moot? Although they climbed back above he pre-November 30 OPEC deal, but
they are still lower than the closer of the first day after the deal.
Baker Hughes last Friday report of its first decline in 24 weeks, by two rigs, send oil
2.5-percent up. But, what about the 24 weeks? They are the trend, not this one-time decline
within 24 weeks. The rig count has more than doubled from May’s 316 low. The reports of
oil companies’ hedges guaranteeing them $50 a barrel, compounded with other reports of
production even as low as $20, is where the risk in this market is, not the upside.
The Technical Perspective
Oil has been trading within a falling channel since February. It has executed a dead cross,
when the 50 dma (green) crossed below the 200 dma (red) in mid-May and confirmed it when
it was retested in June, as the 50 tried crossing over the 200 but fell back. That happened at
the start of the 19%, $10 drop, between late May and June.
After reaching the bottom of the falling channel, a second dead cross was executed, when
the 100 dma (orange) crossed below the 200 dma, putting all three main moving averages in
a bearish formation, in which the more recent the price average, the lower it trails, pointing
at where prices momentum is headed. At this point, oil was due a correction, as short
traders realize profits and bottom feeders increase demand. For readers who point out
that the correction didn’t reach the channel top, it’s not a perfect world. The RSI, however,
demonstrates that the movement’s momentum had in fact reached the channel top. Oil
climbed $5, half of the preceding decline. Most corrections retrace half of the preceding move.
However, even more important than the return percentage is traders’ map of supply-and-
demand. The price just so happened to stop at the March trough, then a support. However, a
violated support often turns resistance, as short sellers receive confirmation and the buyers
join the trend, resulting in a downward pressure, where once was an upward pressure.

12. 05/07/2017
Another seeming coincidence is that the price stopped dead once reaching the 50 dma
(green), where we forecast the correction is likely to end.
Since beginning to research for this article, the price had plunged 1.6-percent, from a 10th-day
gain to what is on course to be the first decline since the June 22 rally. This development also
adds the candlestick Bearish Engulfing pattern, which is likely to start a snowball effect of an
ever-rising tide of traders questioning whether they have gone too far. Should the correction
take place, traders who are still running up with the heard, will run off the cliff and plunge,
along with prices, toward the $40 abyss.
Trading Strategies
Conservative traders
would probably prefer
to wait on a short for a
possible return move to the
$47 resistance, above which
they would place their stop-
loss.
Moderate traders may
be happy with a return
to yesterday’s low of
$46.74, which would be
almost half of today’s
decline, and assume the
risk of the other half, with
a stop-loss above $47.
Aggressive traders -
who are willing to take
more chances, hoping
that whatever losses they
incur would be offset and
rewarded with less missed
opportunities – would likely
short now.
Confirmation by Energy Stocks
We can find confirmation to the end of the correction within a falling channel via an identical
trading pattern among energy stocks.
S&P 500 Energy
Energy stocks are trading within a falling channel.They’ve corrected against the trend and now
reached the top of the channel, upon which its resistance is expected to force them back down.
The price on Monday reached the 50 dma (green), where it stopped, and a dead crossed was
executed in late May, when the 100 dma (orange) crossed below the 200 dma (red). All the same
elements as the commodity.

13. 05/07/2017
Terms & Disclaimer
The sale of this document is to its buyer’s company alone. No part of this document is to be
reproduced, emailed or shared outside of the client’s company, without written permission.
This market brief was written by Pinchas Cohen, who does not hold an investment advice
license and is therefore not written for retail investors. All investments have many risks
and can lose principal in the short and long term. The information contained herein is not
guaranteed, does not purport to be comprehensive and is strictly for information purposes
only. Anyone reading this agrees, understands and accepts that they take upon themselves all
responsibility for all their investment decisions and to do their own due diligence, and not to
hold Pinchas Cohen responsible. Pinchas Cohen does not assume any liability for any direct,
indirect or consequential loss that may result from the reliance by any person upon any such
information or opinions. Any expressions of opinions are subject to change without notice.
This document does not constitute an offer or an invitation to trade or invest. No party should
treat any of the contents herein as advice.