Market Overview – Morning Express
– Credit Suisse dominates news flow over the weekend, on the health of its balance sheet amid a historic surge in rates. The CEO moved to soothe worries in a memo that called reports “factually inaccurate” and unveiled initiatives to deleverage riskier parts of their balance. The stock fell 20.8% during the week of September 19th, before slipping another 5.3% last week, and pointing down another 5% this morning.
– Crude oil is sharply higher after OPEC+ moves to meet in person. Reports point to a cut of 1 mbpd and more. As Crude rallies into Wednesday’s meeting, are we getting a ‘buy the rumor, sell the news’ event?
– The U.K. government reverses course and throws out plan to cut taxes for highest earners. British Pound is pointing higher this morning, erasing its entire fallout from September 23rd onward. The Yield of 10-year Gilts has fallen about 70bps from last Wednesday’s peak, reaching a one-week low.
– Our focus in the written version of the Morning Express on Tuesday, Wednesday, and Thursday will focus on the Federal Reserve tightening financial conditions amid economic conditions visibly deteriorating; ‘Damned if They Do, Damned if They Don’t’
– ISM Manufacturing due at 9:00 am CT, SPGI Manufacturing PMI final Sept due at 8:45 am CT.
– Atlanta Fed President Bostic talking ahead of the bell, Richmond Fed President Barkin speaks at 10:45 am CT, Kansas City Fed President George, a 2022 voter, speaks at 1:15 am CT, and NY Fed President Williams, permanent voting seat, speaks at 2:10 pm CT.
E-mini S&P (December) / NQ (December)
S&P, yesterday’s close: Settled at 3601.50, down 52.75 on Friday and 107.50 on the week
NQ, yesterday’s close: Settled at 11,035.50, down 192.75 on Friday and 341.25 on the week
– The quarterly close was ugly, a buyer’s strike, but does a new quarter bring a breath of fresh air. Things are pointing positively ahead of the opening bell.
– The first hour will be telling as price action faces levels of critical resistance defined below.
– Will be crucial for the tape to hold above our Pivot and point of balance through that first hour at 3613.75-3621 in the S&P and 11,090 in the NQ.
– Such construction will build for a test of major three-star resistance in the S&P and NQ at 3697.50 and 11,222-11,266.
Resistance: 3639-3642**, 3661.25-3662**, 3682.50-3684.50**, 3697.50***, 3708.75-3713.75**, 3732-3741.75****, 3751.25**, 3761.50-3763**, 3772***
Support: 3601.50***, 3587***, 3571.75**, 3491-3500.75****
Crude Oil (November)
Yesterday’s close: Settled at 79.49, down 1.74 on Friday and up 0.75 on the week
– Per our note above, Crude oil is sharply higher after OPEC+ moves to meet in person. Reports point to a cut of 1 mbpd and more. As Crude rallies into Wednesday’s meeting, are we getting a ‘buy the rumor, sell the news’ event?
– U.S. imposed sanction on Indian Oil firm for dealing with Iran. Additional sanctions on Iran coming down the pipeline from EU for government reaction to protests. Iran still says a Nuclear Deal is possible, but we find it less and less likely, helping to buoy prices.
– Price action has cleared the 21-dma early 83.47, aligning with previous resistance to help create our Pivot and point of balance on the session; bulls in the driver’s seat while above here.
– Still, major three-star resistance looming at 84.91.
Resistance: 84.10**, 84.91***, 86.54-86.68***, 88.96-89.63***
Support: 81.63-81.94***, 79.97-80.35***, 79.08-79.49***, 78.49**, 77.80**, 76.21-76.55***, 75.21***
Gold (December) / Silver (December)
Gold, yesterday’s close: Settled at 1672.0, up 3.4 on Friday and 16.4 on the week
Silver, yesterday’s close: Settled at 19.039, up 0.327 on friday 0.129 on the week
– Silver and Platinum are leading higher this morning with Gold trading firm.
– Relief on the currency front, but mainly rates has helped underpin the strength.
– Odds of a 75bp hike in November slipped from 72.5% probability one week ago, to 54% today.
– Geopolitics and deteriorating global financial conditions helping to boost precious metals sentiment.
– With Silver breaking out, our next bit level is rare major four-star resistance at 21.02-21.41. With strong resistance in Gold at 1696-1699.
Resistance: 1681-1685**, 1696-1699***, 1710.2**, 1723.4***
Support: 1653**, 1640.4**, 1630.2-1631.9***, 1623.2***, 1600**
Resistance: 20.42-20.45**, 21.02-21.41****
Support: 18.98-19.05***, 18.71-18.75***