Market Overview – Morning Express
– Do not miss our Top Things to Watch this Week
– Risk-assets gap lower on the open last night as Russia-Ukraine conflict deepens. The West freezes assets from the Central Bank of Russia and shuts many banks from the SWIFT system.
– Russia and Ukraine officials will meet today. Although President Zelensky was not high on outcome.
– Again, less uncertainties and risk-assets rebound; S&P 2% from opening low. Though notably higher, Crude Oil 2%, Gold 1%, and U.S. Dollar Index 0.5% from opening highs.
– Central bank of Russia raised key interest rate from 9.5% to 20% to stabilize the Ruble, which fell as much as 34% and is now only down 20%.
– EU’s support gains steam: Germany increases defense spending to 2% of GDP from 1.5%, Germany/NATO provide anti-tank weapons.
– Marks a historic shift in German policy, sending weapons to conflict zones.
– Western Energy exits Russia; BP will sell 20% share of Rosneft and Norway’s Equinor pulls out.
– Thursday’s high in the VIX is below January 24th high and ceiling at 40.0 now thought as peak fear level.
– Today VIX is between Thursday’s high and Friday’s low.
– Wholesale Inventories for January, first look, lower than expected at 0.8% versus 1.3%; a positive on the demand outlook of economy
– Keeping an eye on impact of Atlanta Fed GDPNow, Friday was 0.6% for Q1. Due Tuesday.
– China February PMIs due at 7:30 pm C
E-mini S&P (March) / NQ (March)
S&P, yesterday’s close: Settled at 4380, up 96.00 on Friday and 36.50 on the week
NQ, yesterday’s close: Settled at 14,180.50, up 214.00 on Friday and 184.50 on the week
– We took a broadly Bullish approach from Thursday through Friday’s close. Remember, our upside target of clearly defined here as well as suggested on Thursday’s Midday Market Minute was perfectly achieved at 4358-4371.50.
– Only greed would have kept you in through the weekend.
– We remain Bullish in Bias due to several factors
– VIX did achieve peak, neared 40.0
– Sentiment is bearish, leaves managers under-positioned
– Friday’s reference, “buy the invasion”, less uncertainties
– Peak Fed hawkishness.
– Not to mention we have been comparing January peak through this selloff as an elongated September 2021 pattern that could test 4100. This has played out.
– Still, traders must stay nimble given news flow and capitalize on ample opportunities
– There are many strong supports detailed below.
– Still, must see price action hold constructively out above … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (April)
Yesterday’s close: Settled at 91.59, down 1.22 on Friday and up 1.38 on the week
– Uncertainties do persist involving Russian Oil, thus the spike on the open last night.
– Remember markets are efficient, be smart, do not chase that open.
– OPEC+ meets this week, likely to add another 400,000 bpd for April
– OPEC+ could agree to release 70 million barrels from reserve. A drop in the bucket, could erode spare capacity and ultimately tighten physical market in aftermath upon any disruptions.
– Remember, the Middle East and Oil producing countries often have conflicts but does not disrupt OPEC+ business.
– Friday’s low of 90.06 essentially held our major three-star support at 90.32-90.64
– Friday’s settlement of 91.59 aligns with previous support and now become gap area
– Floor building at $90.
– Point of balance on the session is our momentum indicator… Click here to get our (FULL) daily reports emailed to you!
Gold (April) / Silver (May)
Gold, yesterday’s close: Settled 1887.6, down 38.7 on Friday and down 12.2 on the week
Silver, yesterday’s close: Settled at 24.017, down 0.693 on Friday and down 0.21 on the week
– Notably, Gold and Silver finished down on the week, but have regained those levels coming out of the weekend.
– U.S. Dollar is erasing gains and will be seen as a positive for Gold in near-term given firm Treasury landscape.
– Nonfarm Payrolls and Fed speak this week cannot be ignored.
– Constructively, supports did hold through Friday
– Despite the spike, big levels of resistance, detailed below, are holding. Cannot ignore this.
– Still, point of balance is our momentum indicator, bulls in driver’s seat while above … Click here to get our (FULL) daily reports emailed to you!