International Long Shoremen Association Strike Looms
Technical Charts
Good evening, we just wanted to touch upon a very important subject which will effect all of us in one way or another.
The International Longshoremen's Association (ILA) is set to strike on October 1st, 2024, at all Atlantic and Gulf Coast ports from Maine to Texas. This action, if it proceeds, could significantly disrupt supply chains and impact the US economy.
Key Points to Understand:
Negotiations: The ILA and the United States Maritime Alliance (USMX) have been engaged in contract negotiations, but a deal has not been reached.
Key Demands: The ILA is seeking wage increases, improved healthcare benefits, and protections against job losses due to automation.
Economic Impact: A strike could have far-reaching consequences, affecting everything from consumer goods to industrial materials. The impact could be felt globally due to the US's role as a major trading partner.
Potential Alternatives: While a strike seems imminent, there's still a possibility of a last-minute deal or government intervention to prevent the action.
Potential Impacts of the Strike:
Supply Chain Disruptions: Delays in the movement of goods, leading to shortages and price increases.
Economic Losses: Billions of dollars in lost economic activity, both domestically and internationally.
Job Losses: Potential layoffs in industries that rely on timely delivery of goods.
Inflationary Pressures: Increased costs for businesses and consumers.
A strike by the International Longshoremen's Association (ILA) would have a significant impact on several key industries:
1. Automotive:
Impact: Disruption in the supply chain of components like engines, tires, and electronics.
Reason: Many automotive manufacturers rely on imported parts that are shipped through East Coast ports.
2. Retail:
Impact: Delays in the arrival of goods, leading to shortages and potential price increases.
Reason: Retail stores often rely on imported products that are transported through major ports.
3. Agriculture:
Impact: Delays in exports of agricultural products, such as grains and fruits.
Reason: A significant portion of US agricultural exports are shipped through East Coast ports.
4. Manufacturing:
Impact: Disruption in the supply chain of raw materials and finished goods.
Reason: Many manufacturing industries rely on imported materials and components that are shipped through ports.
5. Construction:
Impact: Delays in the delivery of building materials, such as lumber and steel.
Reason: Construction projects often rely on imported materials that are shipped through ports.
6. Energy:
Impact: Potential disruptions in the supply of oil and natural gas.
Reason: A portion of US energy imports are shipped through East Coast ports.
7. Consumer Electronics:
Impact: Delays in the arrival of electronic devices, such as smartphones and computers.
Reason: Many consumer electronics are imported from Asia and Europe through East Coast ports.
The Union leader Harold Daggett was all over X today, stating how this, “will cripple you!”
" Whose gonna win here in the long run? Your better off sitting down and lets get a contract and lets move on with this world. In today’s world I’ll cripple you and you have no idea what that means, nobody does!
So all the geopolitical issues abroad, with continued Israeli strikes in Lebanon and Syria and Ukraine/Russia, its amazing risk assets continue to plow forward. We don’t know what the real catalyst will be, but something is very very off here.
Alright so that is the big news that we feel you guys should be very aware of as we start the month off. Speaking of we added the monthly Net Changes to our settlement sheets and it allows you to see who were the big winners and losers in September:
The metal sector was the big winner with the energies faltering outside of Nat Gas which no doubt is benefitting from the Ukraine situation.
As far as the US bond market today saw a bear flattening move with the 2Y sector rising 8.8 basis points here is today’s yield curve snap shot:
Ok onto the technical charts, as noted September post rate cut saw a significant equity markets rally and we knew the upside potential was there. Have we reached some significant resistance areas? Perhaps, but we are not in the business of picking tops, rather we like to move up our reversal areas when things run one way or another. As far as the SP500 futures 5725 is our area below to flip the bull theme now, so all you longer term time frame players, our sentiment is still higher unless this area below gives way on a weekly time frame closing mark:
As far as the Nasdaq futures 19800 area is our key support underneath and we would expect the tide to turn south on a weekly close below this level and start to drag in momentum sell side players:
One other equity futures chart we want to look at is the Dax, this market has had a juicy break out run but we suspect some profit taking will occur here and the 19000 area close below would do some significant technical damage to this continued bull run so keep an eye on that level:
We also wanted to look at the QQQ ETF 486 is a major level and a close on a weekly below that would be very telling, so all you bulls you can stay long above this level, below, well you are taking on some very bad odds in our opinion:
In other news we saw that TD Securities was charged in a US Treasury spoofing scheme and the firm also failed to supervise the head of its U.S. Treasuries desk. This stuff really annoys us because we have traded the US Treasury secondary market for many years and we could always tell when someone was in there manipulating it. Now TD will pay over $20 million in fines. This enforcement action is good to see, but we are sure this goes on almost every single day!
Alright guys, buckle up its October in a year of a rate cut regime change and a record negative carry going on its 3rd year in a row. We are in unprecedented territory and we can only say anything is possible but we don’t want to lose sight of the fact that things have changed, that the world is becoming a whole lot more destabilized and not to mention we have an election in 36 days! We hope you stay the course, we hope you decide to support our work and we will continue to bring you content in which we believe to be important for our readers and listeners. We are awaiting our new disclosure document approval from the National Futures Association, we have a new program launching but until this is approved our CTA website will be down until this document is approved. We hope you explore our work more and as always it is our goal to make you the most informed person at the party!