Weekly Spx and Ndx charts just to have a big picture look at rally.5 consecutive higher closes.
Percentage of fed hike in December now 50-50,up from mid 40’s yesterday.. Today’s second tier data showed a down-tick In inflation,Less confident consumers and A PMI reading out of Chicago that equaled the best month this year.Weak inflation and Month end adjustment weighing on Dollar today,I believe.We have seen a solid move higher in Yuan fixing,EM currencies all higher vs dollar, The Yen higher after no new Stimulus ,New Zealand had best month vs greenback in 2 years,Indias rupiah 7.2% monthly gain largest in 6 years So quite possible month end positioning is trying to maintain gains against dollar,and next week the path of the dollar will return higher.96.589 the low print before FOMC statement on Wednesday, should provide support.Monthly London Fix at 11:00 will be watched closely.
Month end flows love that term will dictate the action today.Today and 2 days prior the pit high in Spuz 2086,will be watching that level.
The general consensus is that Crude Oil has been higher on Expectations that Cuts in R&D and exploration will eventually reign in supply.Oil and Gas companies have been slashing spending as aggregate amount of $19B in write downs has been announced from companies reporting so far.Chevron cutting 6-7k employees,Exxon cutting production and slashed R&D 22% Y/Y.
Gold is falling out of favor once again as Investment choice,having its worse week in 9.Copper set for 5 monthly drop in 6.
Remember payroll report next week,markets already in holding patter till then.Watching Europe/london close for hopefully some action.
Just a few thoughts on the technical of The indexes. SPX, DOW and NDX have all been trading above respective 200d MA .The SPX and DOW for about 5 days,NDX for about 10 days.The 200d is more a of a guide post then a definitive point of ‘ bull or bear’ for the long-term direction of underlying asset.The longer asset stays above the metric the more the slope starts to turn higher which gives confidence that trend will continue higher.Enough of that Mumbo jumbo,Last Thursday ECB hinted at more QE in December,The Indices gapped higher on open and have stayed above gap ever since.Powerful combination of a gap and 200d MA to keep Bulls happy.A test of the gap and 200d will be forthcoming,if they hold could be smooth sailing for bulls into year-end.
Into Europe where the QE impact is felt more directly,The Stoxx50 and Dax have yet to trade above 200d MA,The CAC sits above.If the Dax can break above and maintain trade above that level it could give a real nice lift to all Stock markets as it is a Proxy for exporting countries.A continued weakness in Euro will definitely help accomplish that feat.(11053 is level as I write)
Something to monitor next couple of days
Crude Oil continues to shine as it rallies and outperforms Brent.Plenty of bearish headlines for Brent Iraq and Russia announcing another increase in production.. Crude side of ledger Small amounts of Oil exported to mexico and japan,Draw at cushing delivery point(genscape announced outflow today as well) .Refinery maintenance is ending,and demand will pick up as they come back on line.lastly majority of oil related companies will be reporting earning over next week and half,Chatter is that the cuts to production and Exploration will be large and hence less crude next year.Crude calendar spreads are bid and CL/CO spread as well, this does illustrate a bullish outlook,for now.
International grain federation increased size of Worldwide Crops for 4th time this year.Solid export numbers for Soy,Wheat and corn but yet trade heavy.limited movement cash/farmer selling has markets looking for some type of driver.The time for exciting grain trade is nearing the end.Soymeal has yet to break support with any type of momentum.For Wheat Increase in Drought conditions for Midwest and lack of Rain Ukraine for next 2 weeks provide a bid.
Spuz have failed to trade above yesterdays highs and Dollar continues to give back some of yesterdays gains.Strong Dollar= Strong stocks.
Short and long End being sold in Europe and USA as Dovish Fed bets are being unwound.
Theme today is of readjusting to the new fed order regardless what net change of dollar is .
Soymeal starting to price out any worries concerning harvest.Cash prices today are steady to lower.Waiting for a break below 299.80
Soymeal Dec/march spread backwardation coming out as it trades below 200d SMA as Supplies should be plentiful.markets are cautious though as farmer sales are slow to materialize,but they will come.