Market Overview – Morning Express
– In an interview with 60 Minutes, President Biden reiterated U.S. troops would defend Taiwan, “Yes, if in fact there was an unprecedented attack.” However, the White House said U.S. policy regarding Taiwan has not changed.
– Central bank extravaganza. The U.S. Federal Reserve headlines the week with a policy decision on Wednesday at 1:00 pm CT, but we also look to decisions from the Bank of Japan, Swiss National Bank, and Bank of England early Thursday. Additionally, emerging market central banks from Indonesia to Turkey will meet.
– China will quote its Loan Prime Rate tonight at 8:15 pm CT, after cutting it by 5bps one month ago, for the first time since December.
– Do not forget FedEx warning to finish out the week. More warnings to come?
– Slew of central bank tightening erodes growth outlook and puts risk-sentiment on its back foot.
– Odds for the Federal Reserve to hike by 75bps on Wednesday sit at 80%, with 200bps through yearend hanging at 56.1%.
– U.S. 10-year Note yield poked to a new swing high of 3.518% before retreating. The 30-year Bond yield held below last Tuesday’s high of 3.572%.
– Long-end yields have retreated due to eroding global growth story.
– Goldman Sachs lowered is U.S. GDP estimate to +1.1% in 2023, from +1.5%. Their 2022 estimate was left unchanged at 0%.
– Weaker growth outlook driving Crude Oil, equity markets, and commodities broadly, are lower on the session.
– Short-end yields, like the 2-year are holding at new highs.
– 2s10s curve flatten deepens, testing -0.50bps, the theoretical line in the sand.
– U.K is on holiday today due to Queen Elizabeth’s funeral. Japan is also on holiday.
– U.S. NAHB Housing Survey due at 10:00 am CT.
E-mini S&P (December) / NQ (December)
S&P, yesterday’s close: Settled at 3890, down 29.25 on Friday and down 195.50 on the week
NQ, yesterday’s close: Settled at 11,933.50, down 74.00 on Friday and 736.75 on the week
– Price action rebounded into Friday’s close to retest 3900. This relieved gamma pressures. Theoretically, dealers had to sell less as the market moved lower and therefore had less shorts to cover. In turn, this allowed for the market to remain in trend post-OPEX; lower.
– Previous support is now strong resistance, our second major three-star resistance level, at 3900-3905 in the S&P and 11,797-12,036 in the NQ; price action must close above here to even begin opening the door for neutralizing this wave of selling.
– Trend remains lower while maintain below major three-star resistances and points to a direct test of major three-star support in the S&P at 3802-3817.25. A hold here would build out a right shoulder in inverse head in shoulders.
– Pivot and point of balance comes in at … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (November)
Yesterday’s close: Settled at 84.76, up 0.11 on Friday and down 1.60
– November is front month.
– Technical failure of lower highs continues to play out.
– Failure at rare major four-star resistance at 89.43-90.39 in the October on Wednesday has paved the way for selling.
– Technicals and broader global growth outlook in the face of central bank policy meetings this week is holding the upper hand, over OPEC+ missing August output target by 3.583 mbpd and China reopening Chengdu.
– As Bill Baruch discussed on Friday with TD Ameritrade, a flush is needed to cleanse and rebalance the market.
– Rare major four-star support stands at … Click here to get our (FULL) daily reports emailed to you!
Gold (December) / Silver (December)
Gold, yesterday’s close: Settled at 1683.5, up 6.2 on Friday and down 45.1 on the week
Silver, yesterday’s close: Settled at 19.381, up 0.112 on Friday and up 0.614 on the week
– Gold is clearly trending lower, but Silver and Platinum are experiencing short-covering and an ongoing bid from industrial green demand.
– This makes for a push and pull within the market. We will maintain a cautiously Bearish Bias due to Gold’s overpowering nature. However, if you have followed us short, it is imperative to monetize the idea and capitalize on something.
– Sellers have an upper hand with continued action below our Pivot and point of balance at … Click here to get our (FULL) daily reports emailed to you!