Morning 3-28

Bloomberg Headline “Tech Carnage takes breather as market hits support”
It isn’t Just Facebook that is causing pain in Big tech TSLA -8% yesterday down 8-10 days, nvidia down 7.7% yesterday and 5-7 days as the Self driving car accident last week darkens the future of driver-less Technology. Besides individual Stock, worries recall that Trump has said he wants to crackdown on Chinese investments in technologies that US considers Sensitive. Selling begets more selling so as Quarter end approaches maybe some weak hands are forced to sell some of their tech holdings. Bloomberg has a graph showing the spread between the IV of Nasdaq and Spx reaching a multi month high indicating NASDAQ is the Index leading the Volatility in Stock markets. One more comment on FB, 5-day average volume in stock was ~19 mln shares a day. 3 of last 7 day volume over 100 mln and all 7 have been over 50 mln, over this 7 day period from high to low stock down 19%.Watching 200D MA in SPX 2587(2586 in Futures) Currently Spoos and Nasdaq steady to higher, Europe trading lower Dax -.6% NKY closed lower by 1.34%. All eyes on NASDAQ today.
The probability for US rate hikes this year has changed little this week as the chaos in stock, market has little to do with macro-Economic worries. Bunds a bit higher as are bonds as the nervous stock market providing a bid in complex. Focusing on the 5 year shows prices breaking out of a Sideways 6 week range. Record amount or near record amount of net shorts in 5-year futures providing plenty of ammo if this short squeeze picks up momentum. Month end, Quarter end, holiday all in same week will dry up liquidity and possibly lead to outstretched moves.
Dollar has small bid this morning But JPY being sold vs all majors as the School scandal surrounding the PM and Fin Min back in the headlines today. Lower JPY is a good sign for Risk on Sentiment. Dollar choppy to lower on the short term and one reason for this is that nobody can say whether tariffs are good or bad for the dollar. Today’s GDP is the final look at Q1 it should not have much impact on trade. Instead, I will be looking at trade balance numbers also released at 7:30.
Other markets Oil down .6% as yesterday’s API numbers surprised with a bigger build to oil stocks than expected. Gold -.7%, copper little changed and Cocoa -1.7%
All eyes on big tech to drive sentiment and action today

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.