– Sector divergence: Dow Jones -3.5% in November and +1% so far this month after this morning’s rise. NQ +2% in November and -3.15% so far this month. Chart above.
– Bond breakout, 30-year yield at the lowest since first week of 2021.
– 5-30yr spread flattest since the Saudi-Russia fallout on March 9th, has broken significant trend line. Chart above.
– Are Bonds worried about Omicron or a policy mistake from Fed?
– Crypto crash is weighing on Tech, makes it tough to decipher what Tech sector is telling us on Omicron or Fed policy. NVDA -4% and AMD -2.5%.
– China cut banks’ RRR by 50 bp as Evergrande fallout continues.
– Federal Reserve now in quiet period ahead of next Wednesday’s policy decision
– Economic calendar on lighter side this week before big U.S. CPI read on Friday.
– Nonfarm Payroll whiff on Friday, however you cut it this was a bad report. Yes, many have diced it positively. 235k jobs created versus 530k expected. Wages increased less than expected 0.3% vs 0.4% MoM and 4.8% vs 5.0% YoY.
– Jobs report coupled with Omicron uncertainty (at this point), theoretically should offset last week’s hawkishness from Powell and company.
– Although too early to declare peak virus, this is a theme to watch closely. Does Omicron spread more rapidly but less severe? Creates natural immunity.
E-mini S&P (December) / NQ (December)
S&P, yesterday’s close: Settled at 4537.50, down 38.25 on Friday and 58.25 on the week.
NQ, yesterday’s close: Settled at 15,717.75, down 270.75 on Friday and 333.25 on the week
– S&P plunged 4500 on Friday, also the 50% retracement on Sept-Nov range. Defended and rebound in final minutes back to the 50-dma that comes in at 4540 today.
– We do have major three-star support at 4472-4478 in the S&P, aligns multiple indicators with the September ceiling and October breakout. However, A decisive break below 4500 would theoretically encourage positioning to turn negative.
– NQ is battling at 50-dma at 15,625, major three-star support aligning with 50% retracement on Sep-Nov range at 15,567-15,594, and previous record highs at 15,700,
– Ultimately, a lot of support at current market ranges. Also, Dow testing near September lows and Russell 2000 into what has proven to be a floor at 2100.
– Momentum indicators have so far ignored the worst of Friday’s selling due to strength late Thursday and early Friday. S&P point of balance at … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (January)
Yesterday’s close: Settled at 66.26, down 0.24 on Friday and 1.89 on the week
– Saudi Arabia raised prices to Asia for the second month (and the U.S.), a vote of confidence in Oil market.
– China’s RRR buoying otherwise deteriorating sentiment amid Evergrande saga.
– Bullish tailwinds from Iran. Signs late Friday Nuclear Deal progress dissipating. U.S. Secretary of State Blinken said “Iran does not seem serious about returning to compliance”.
– Price action has regained the 200-dma after slipping below in second half of Friday’s session upon broad market de-risking.
– Good rejection off Thursday’s selling, low of 62.43, held well out above August 20-23 price action. January contract low of 60.77 and front month low at 61.74 (October contract).
– Momentum indicator brings point of balance at … Click here to get our (FULL) daily reports emailed to you!
Gold (February) / Silver (March)
Gold, yesterday’s close: Settled at 1783.9, up 21.2
Silver, yesterday’s close: Settled at 22.481, up 0.165
– Price action in Gold has so far responded to rare major four-star support at 1757-1766
– Price action also responding upon equity weakness; this is what you want if bullish metals.
– Silver flush was rejected, finished 2% from low of 22.03, but gains dissipating into U.S. hours as equity markets rebound and yields firm. Weighing on Gold too.
– Gold’s rebound testing into major three-star resistance at … Click here to get our (FULL) daily reports emailed to you!
You can sign up for a free trial here: https://www.bluelinefutures.com/free-trial