September 27 Market Update | Technical, Fundamental, News
Updated
Description:
An analysis for the week ahead.
Points of Interest:
$3,200 High Volume Area; Friday’s Divergence From Value; Balance Area.
Technical:
Broad-market equity indices ended lower with the S&P 500 correcting as low as $3,200.
Recapping last week’s action, Monday's test of the $3,200 high-volume area offered responsive buyers an opportunity to get in at favorable prices. Buying continued through Tuesday, before resisting an area of resting liquidity at $3,300.
After disappointments in business activity data and stimulus talks, on heavy-volume and supportive delta, Wednesday's liquidation erased the entire week’s gains. Alongside improvements in home sale data, mega-caps and technology led the market higher, through Friday's close, away from value.
Overall, in the bigger picture, the market is churning above $3,200, the site of a large high-volume area which denotes the market’s recent perception of value. When prices trade to a high-volume area, on a swing up auction, then trade should slow allowing responsive longs a good place to enter. Should prices trade and spend time below this area, then perceptions have changed and longs are no longer favorable, at least in the near term.
Scroll to bottom of document for non-profile charts.
Fundamental:
John Authers, a Bloomberg columnist, suggested gold is falling due to rise in real yields.
“When real yields rise then gold, which pays no income, can be expected to fall. This is true even if real yields are rising from deeply negative territory. To explain the intuition behind this, gold is widely regarded as a hedge against central banking irresponsibility. Recent speculation is that the Fed may not print money and cut rates with quite the gay abandon that had been assumed. This may or may not be good news for the U.S. economy, but it raises real yields and for investors in gold and in risk assets, who might benefit from currency debasement, it is definitely bad news.” bloom.bg/3n0gS9M
Simply put, the theory that the Federal Reserve exhausted itself has buoyed real yields, which have an inverse relationship to metals.
Key Events:
Monday: Fed Mester Speech.
Tuesday: Goods Trade Balance, Fed Williams Speech, Fed Harker Speech, CB Consumer Confidence, Fed Williams Speech, Presidential Debate.
Wednesday: MBA Mortgage Applications, ADP Employment Change, GDP Growth Rate, Core PCE Prices QoQ Final, Corporate Profits, GDP Price Index, PCE Prices QoQ Final, Pending Home Sales, EIA Cushing Crude Oil Stocks Change, EIA Distillate Stocks Change, Fed Kashkari Speech, Fed Kaplan Speech.
Thursday: Core PCE Price Index YoY, PCE Price Index YoY, Continuing Jobless Claims, Core PCE Price Index MoM, Initial Jobless Claims, Jobless Claims 4-Week Average, PCE Price Index MoM, Personal Income MoM, Personal Spending MoM, Markit Manufacturing PMI Final, ISM Manufacturing PMI, Construction Spending MoM, ISM Manufacturing Prices, Fed Williams Speech.
Friday: Non-Farm Payrolls, Unemployment Rate, Average Hourly Earnings MoM, Average Hourly Earnings YoY, Average Weekly Hours, Non-Farm Payrolls Private, Participation Rate, Fed Harker Speech, Michigan Consumer Sentiment Final, Factory Orders MoM, Michigan 5 Year Inflation Expectations Final, Michigan Inflation Expectations Final.
Recent News:
Fed publishes scenarios for the second round of 2020 stress tests, a credit positive. bit.ly/33NHNwn
Sea level rise increases credit risk for U.S. coastal states and local governments. bit.ly/33NHNwn
Airlines are calling for COVID-19 coronavirus tests before all international flights. reut.rs/345lySS
Intel Corporation (NASDAQ: INTC) gets U.S. licenses to supply to Huawei. reut.rs/3kRkEA9
China air force video appears to show a simulated attack on U.S. base on Guam. reut.rs/3jlnMEl
How secular shifts will force the U.S. commercial real estate market to adapt. bit.ly/336w1hG
Government aid and stock gains pushed U.S. wealth to pre-pandemic levels. reut.rs/3cBT5rM
As U.S. business activity loses momentum, home price inflation accelerates. reut.rs/2S5j15K
JPMorgan Chase & Co (NYSE: JPM) to pay nearly $1 billion in spoofing penalty. reut.rs/340YUel
Higher inflation regime in medium term after decade of persistent undershooting. bit.ly/3kSyK4e
A jump in U.S. coal railroad volumes, 2021 forecasts are driving up sentiment. bit.ly/342Pz5J
Global banks seek to contain damage over $2 trillion of suspicious transfers. reut.rs/2ECIAYB
Amazon Inc (NASDAQ: AMZN) pushes security with indoor drones, car alarms. reut.rs/3mUyGmz
Crude, product prices diverge as market looks to U.S. stimulus, COVID situation. bit.ly/2S2PFVt
IEA analysis of innovation in batteries and electricity storage, based on patent data. bit.ly/2Hxz2PH
U.S. upgrades accounted for three-fourths of affected debt in the latest period. bit.ly/334LKxC
Hedge funds see opportunity in the New York, San Francisco apartment markets. reut.rs/2G9oPbA
Low interest rates create pension and investment challenges but lower debt costs. bit.ly/2HBZaJp
China is on course for record LNG imports as industries recover and expand. reut.rs/340nGLP
General Electric Co (NYSE: GE) plans to stop making coal-fired power plants. reut.rs/2S0ugfJ
COVID ‘firepower’: Britain imposed six month curbs against a second virus wave. reut.rs/3cBg2LR
Microsoft Corporation’s (NASDAQ: MSFT) acquisition of ZeniMax credit positive. bit.ly/336ZNCT
Bombardier Inc’s (OTC: BDRBF) agreement to sell transport unit credit negative. bit.ly/336ZNCT
Coronavirus resets Latin American economies at lower base, driving asset risks. bit.ly/336ZNCT
California banning sale of new gasoline-powered passenger vehicles in 2035. reut.rs/30bLTO2
Data is suggesting that splits fundamentally change how stocks perform. bit.ly/2G71WpB
The corporate bond issuance boom may steady credit quality, on balance. bit.ly/3cB8p7W
Per earnings and interest rate forecasts, valuations not supported fundamentally. bit.ly/334LKxC
Data expected to confirm sentiment eased across most European countries. bit.ly/334LKxC
Wary buyers and softer foreign demand, likely raised Japan’s unemployment rate. bit.ly/334LKxC
On balance, 2020’s bond issuance boom enhanced overall financial flexibility. bit.ly/334LKxC
Demographics and the rising cost of funding retirement may affect valuations. bloom.bg/3mTw5sZ
Key Metrics:
Sentiment: 24.9% Bullish, 29.1% Neutral, 46.0% Bearish as of 9/23/2020. bit.ly/330VhEp
Gamma Exposure: (Trending Lower) 1,152,474,010 as of 9/25/2020. bit.ly/2UpgtRE
Dark Pool Index: (Trending Higher) 42.2% as of 9/25/2020. bit.ly/2UpgtRE
Product Snapshot:
S&P 500 (ES):
SPX 
SPY 
NDX 
QQQ 
RUT 
IWM
Gold (GC):
GLD 
GDX 
GOLD
Crude Oil (CL):
USOIL 
USL DBO USO
Treasury Bonds (ZB):
TLT
Disclaimer:
This is a page where I look to share knowledge and keep track of trades. If questions, concerns, or suggestions, feel free to comment. I think everyone can improve, especially me.
In no way should this post be construed as investment advice.
An analysis for the week ahead.
Points of Interest:
$3,200 High Volume Area; Friday’s Divergence From Value; Balance Area.
Technical:
Broad-market equity indices ended lower with the S&P 500 correcting as low as $3,200.
Recapping last week’s action, Monday's test of the $3,200 high-volume area offered responsive buyers an opportunity to get in at favorable prices. Buying continued through Tuesday, before resisting an area of resting liquidity at $3,300.
After disappointments in business activity data and stimulus talks, on heavy-volume and supportive delta, Wednesday's liquidation erased the entire week’s gains. Alongside improvements in home sale data, mega-caps and technology led the market higher, through Friday's close, away from value.
Overall, in the bigger picture, the market is churning above $3,200, the site of a large high-volume area which denotes the market’s recent perception of value. When prices trade to a high-volume area, on a swing up auction, then trade should slow allowing responsive longs a good place to enter. Should prices trade and spend time below this area, then perceptions have changed and longs are no longer favorable, at least in the near term.
Scroll to bottom of document for non-profile charts.
Fundamental:
John Authers, a Bloomberg columnist, suggested gold is falling due to rise in real yields.
“When real yields rise then gold, which pays no income, can be expected to fall. This is true even if real yields are rising from deeply negative territory. To explain the intuition behind this, gold is widely regarded as a hedge against central banking irresponsibility. Recent speculation is that the Fed may not print money and cut rates with quite the gay abandon that had been assumed. This may or may not be good news for the U.S. economy, but it raises real yields and for investors in gold and in risk assets, who might benefit from currency debasement, it is definitely bad news.” bloom.bg/3n0gS9M
Simply put, the theory that the Federal Reserve exhausted itself has buoyed real yields, which have an inverse relationship to metals.
Key Events:
Monday: Fed Mester Speech.
Tuesday: Goods Trade Balance, Fed Williams Speech, Fed Harker Speech, CB Consumer Confidence, Fed Williams Speech, Presidential Debate.
Wednesday: MBA Mortgage Applications, ADP Employment Change, GDP Growth Rate, Core PCE Prices QoQ Final, Corporate Profits, GDP Price Index, PCE Prices QoQ Final, Pending Home Sales, EIA Cushing Crude Oil Stocks Change, EIA Distillate Stocks Change, Fed Kashkari Speech, Fed Kaplan Speech.
Thursday: Core PCE Price Index YoY, PCE Price Index YoY, Continuing Jobless Claims, Core PCE Price Index MoM, Initial Jobless Claims, Jobless Claims 4-Week Average, PCE Price Index MoM, Personal Income MoM, Personal Spending MoM, Markit Manufacturing PMI Final, ISM Manufacturing PMI, Construction Spending MoM, ISM Manufacturing Prices, Fed Williams Speech.
Friday: Non-Farm Payrolls, Unemployment Rate, Average Hourly Earnings MoM, Average Hourly Earnings YoY, Average Weekly Hours, Non-Farm Payrolls Private, Participation Rate, Fed Harker Speech, Michigan Consumer Sentiment Final, Factory Orders MoM, Michigan 5 Year Inflation Expectations Final, Michigan Inflation Expectations Final.
Recent News:
Fed publishes scenarios for the second round of 2020 stress tests, a credit positive. bit.ly/33NHNwn
Sea level rise increases credit risk for U.S. coastal states and local governments. bit.ly/33NHNwn
Airlines are calling for COVID-19 coronavirus tests before all international flights. reut.rs/345lySS
Intel Corporation (NASDAQ: INTC) gets U.S. licenses to supply to Huawei. reut.rs/3kRkEA9
China air force video appears to show a simulated attack on U.S. base on Guam. reut.rs/3jlnMEl
How secular shifts will force the U.S. commercial real estate market to adapt. bit.ly/336w1hG
Government aid and stock gains pushed U.S. wealth to pre-pandemic levels. reut.rs/3cBT5rM
As U.S. business activity loses momentum, home price inflation accelerates. reut.rs/2S5j15K
JPMorgan Chase & Co (NYSE: JPM) to pay nearly $1 billion in spoofing penalty. reut.rs/340YUel
Higher inflation regime in medium term after decade of persistent undershooting. bit.ly/3kSyK4e
A jump in U.S. coal railroad volumes, 2021 forecasts are driving up sentiment. bit.ly/342Pz5J
Global banks seek to contain damage over $2 trillion of suspicious transfers. reut.rs/2ECIAYB
Amazon Inc (NASDAQ: AMZN) pushes security with indoor drones, car alarms. reut.rs/3mUyGmz
Crude, product prices diverge as market looks to U.S. stimulus, COVID situation. bit.ly/2S2PFVt
IEA analysis of innovation in batteries and electricity storage, based on patent data. bit.ly/2Hxz2PH
U.S. upgrades accounted for three-fourths of affected debt in the latest period. bit.ly/334LKxC
Hedge funds see opportunity in the New York, San Francisco apartment markets. reut.rs/2G9oPbA
Low interest rates create pension and investment challenges but lower debt costs. bit.ly/2HBZaJp
China is on course for record LNG imports as industries recover and expand. reut.rs/340nGLP
General Electric Co (NYSE: GE) plans to stop making coal-fired power plants. reut.rs/2S0ugfJ
COVID ‘firepower’: Britain imposed six month curbs against a second virus wave. reut.rs/3cBg2LR
Microsoft Corporation’s (NASDAQ: MSFT) acquisition of ZeniMax credit positive. bit.ly/336ZNCT
Bombardier Inc’s (OTC: BDRBF) agreement to sell transport unit credit negative. bit.ly/336ZNCT
Coronavirus resets Latin American economies at lower base, driving asset risks. bit.ly/336ZNCT
California banning sale of new gasoline-powered passenger vehicles in 2035. reut.rs/30bLTO2
Data is suggesting that splits fundamentally change how stocks perform. bit.ly/2G71WpB
The corporate bond issuance boom may steady credit quality, on balance. bit.ly/3cB8p7W
Per earnings and interest rate forecasts, valuations not supported fundamentally. bit.ly/334LKxC
Data expected to confirm sentiment eased across most European countries. bit.ly/334LKxC
Wary buyers and softer foreign demand, likely raised Japan’s unemployment rate. bit.ly/334LKxC
On balance, 2020’s bond issuance boom enhanced overall financial flexibility. bit.ly/334LKxC
Demographics and the rising cost of funding retirement may affect valuations. bloom.bg/3mTw5sZ
Key Metrics:
Sentiment: 24.9% Bullish, 29.1% Neutral, 46.0% Bearish as of 9/23/2020. bit.ly/330VhEp
Gamma Exposure: (Trending Lower) 1,152,474,010 as of 9/25/2020. bit.ly/2UpgtRE
Dark Pool Index: (Trending Higher) 42.2% as of 9/25/2020. bit.ly/2UpgtRE
Product Snapshot:
S&P 500 (ES):
SPX SPY NDX QQQ RUT IWMGold (GC):
GLD GDX GOLDCrude Oil (CL):
USOIL USL DBO USOTreasury Bonds (ZB):
TLTDisclaimer:
This is a page where I look to share knowledge and keep track of trades. If questions, concerns, or suggestions, feel free to comment. I think everyone can improve, especially me.
In no way should this post be construed as investment advice.
Note
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This is a page where I look to share knowledge and keep track of trades. If questions, concerns, or suggestions, feel free to comment. I think everyone can improve (myself especially), so if you see something wrong, speak up.
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