Delta1trader Technology - Daily Market Report

Delta1trader Technology

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Market Report Thursday 6th of February 2020



Equity market trade higher this morning, with S&P500 futures up 12 points and Nasdaq 100 futures up 43 points at the time of writing. Crude is up by 48 cents, but almost 1 USD off the highs overnight. Seems the equity markets are not very concerned about the Corona virus compared to commodities and FX, where things are looking a lot more risk off oriented. It makes sense from a money flow perspective as equities looks like the most attractive market to place the huge amount of cheap liquidity from the Central Banks. The Central Banks have become a growth insurance mechanism so to speak, with people believing they will support the markets forever. This leads to investors buying any dip in the equity markets, which has worked great for a long time. It now seems that the only real trigger for a selloff would be an increase in interest rates or a credit crunch of some sort. Almost seems like QE will have to be in place forever to avoid a meltdown in the equities, which would again impact the general economy negatively.

VIX futures are down 0,17 at 15.55, but Forex markets are far away from any risk on mode, with CHF and JPY in the stronger end of the range seen the last 12 months. It seems every time that there is a bit of chaos in the investment world, risk of currencies rally, but they don’t really selloff when the equity markets rally back up, meaning there is a larger and larger disconnect between FX and commodities VS. Equities. FX is more obsessed with where the next 25bp rate hike or cut will happen.

The Calendar is light today, with no major economic releases scheduled. Tomorrow we have the US Nonfarm Payrolls, so that should be interesting. Market is looking for +161k now.

OPEC+ meeting continues today, and I am seeing recommendation for 600k bpd further cut, which should help the Crude markets a bit. However, the selloff in the commodities and energy have been relentless the last two weeks. So, it is hard to pick a bottom, but as the virus threats fade, crude should have pretty good chance to rally.



Key points for today:

  • Crude oil needs to make a daily close above 52 to open for any rally
  • USDCAD has been testing 1,33 numerous times over the last week, make or break decision time?
  • Nasdaq opening drive of 85 points lower yesterday was extremely deep given the recent price action standards. Opening drives have been in general less than 30 points, expect Nasdaq will be more normal today with investors mostly positioned ahead of the NFP now
  • Buy dips in US equities still works well
  • Gap at 1573 in gold futures that bulls needs to close and hold to open for higher prices.


Happy Trading

Erik – Delta1 Trader Technology
 

Delta1trader Technology

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29 0
Market Report Friday 7th of February 2020



Good morning, it is Nonfarm payrolls day. The granddaddy of economic reports, with the expectation being +165K.

Corona virus us the main headline at the moment with 31k confirmed cases and 636 deaths. So far that means it is about 2% of the confirmed cases that have resulted in deaths. This is low compared to SARS and MERS viruses that are similar type of viruses seen in the past. It seems to be a total disconnect between the commodities and energy markets vs the equity markets on the impact of the virus. While equities is all time high based on more cheap funding, the commodities and energy is totally pricing in a demand collapse. Same with the FX markets, pricing in potential long-lasting effects. Something has to give here and either equities sell off or commodities and Energy come back.

OPEC+ has not done enough yet to curb the sell off and we are once again back down below 50.50 this morning. Oil demand from China is down 15% apparently as refiners are processing less crude. This should be short lived as things should start to pick up when the virus is getting controlled better.



Key points for today:

  • Crude oil needs to make a daily close above 52.50 to open for any rally
  • USDCAD finally broke above 1,33, could we see an extension higher?
  • More orderly opening range in the Nasdaq futures yesterday, 34 points
  • Buy dips in US equities still works well and once again working yesterday
  • From yesterday; Gap at 1573 in gold futures that bulls need2 to close and hold to open for higher prices. This gap was closed overnight, and chart looks more balanced now.


Happy Trading

Erik – Delta1 Trader Technology
 

Delta1trader Technology

Junior member
29 0
Market Report Monday 17th of February 2020



Stimulus and more Stimulus. Cheap money rules

The market still looks very supported by the Central Banks. Just the Chinese have put in 300Bln over the last week to counter the virus fears. Chinese announced in early February they would inject 1.2Bln Yuan ($174Bln) liquidity into the markets.

In the US stock market 1/5 of the outstanding shares have been bought back. 1/5, is a huge earnings improvement. S&P500 P/E is at 19, relatively high.

The US markets are now 56% of the total worldwide value, but only 22% of the overall GDP, that is a massive disconnect.

April is the estimated to be the month where this QE should start running off. Put on the crash helmets???

Futures are up this morning on basically nothing, but seems like investors are feeling a bit better with latest Corona virus updates showing a bit of a slowing trend of the spreading of the virus.



Key points for today:

  • Crude oil needs to make a daily close above 52.50 to open for any rally
  • USDCAD was rejected at 1,33.
  • Buy dips in US equities still works well and once again working Friday
  • April Gold looks well supported about 1580
  • Bank Holiday in the US, expect a slow session


Happy Trading

Erik – Delta1 Trader Technology
 

Delta1trader Technology

Junior member
29 0
Market Report Tuesday 18th of February 2020



Futures are down this morning on comments out from Apple that the Corona Virus will impact earnings. This is pretty much expected, and we should see more companies coming out with comments on negative impact from the Corona. This could well impact the market pricing on stocks and might trigger a sell off as the current equity markets valuation looks high on a relative historical basis.

European data has been horrible and this mornings data looked even worse.

German ZEW current conditions came in at -15.7 from -9.5 and the all-important Economic sentiment has come in at a much lower +8.7 from a previous +26.7.

Euro zone Economic sentiment was also much lower at +10.4 against a previous +25.6 for the whole of the Eurozone.

They are dreadful numbers and we cannot ignore what they are saying. We would continue to see both EURGBP and EURUSD lower.

We also feel that Europe is now looking to the ECB for salvation and given they are out of fiscal tools their only option is a lower currency , and we expect that to be done surreptitiously, that is lower rates, more QE , more asset purchases and all under the guise of inflation targeting.

Because of the above we also remain advocates of being long of Gold. It is higher again and we look for the trend to continue.

Lastly, we bring to your attention USDJPY the market is long of JPY as a safe haven against the Coronavirus. We don’t feel that is correct and cannot see the Japanese repatriating any yen in the current environment and thus there is the risk we get a short squeeze here. If it were to go above 109.95 / 110.05 then that would be taking out the long-term trend line resistance and that’s a bullish signal.

Key points for today:

  • Crude oil needs to make a daily close above 52.50 to open for any rally
  • USDCAD was rejected at 1.33. But back up towards 1.3280 now
  • Futures are down, can they bounce back yet again or are we heading much lower?
  • April Gold looks well supported above 1580


Happy Trading

Erik – Delta1 Trader Technology
 

Delta1trader Technology

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29 0
Market Report Wednesday 19th of February 2020



Equity futures are up this morning and the bulls keeps pressing on. China is reporting fewer new Corona virus cases for the second day in a row.

Yesterday we highlighted how bad EU zew data was and reiterated our view that the euro and anything euro should be sold. We still strongly believe that the Euro zone is hemmed in with regards to fiscal policy and they have no choice but to be dovish, cut rates and try to devalue their currency wia the well tested method of inflation targeting.

This morning we have had the UK data and it is again better / above expectations.

Core CPI was +1.6% Vs +1.4%

CPI YOY was +1.8% Vs +1.3%

The rest of the UK PPI data was good as well. On this basis, the UK is outperforming the EU by every metric so far. We have more date tomorrow and Friday for the UK and that’s retail sales and PMI manufacturing. We continue to advocate being short of EUR/GBP.

EUR/USD is again lower and still looks offered and the market has no appetite to squeeze the market higher which is what has happened over the last 10 years. Perhaps they know that it’s the start of the end game this time.

I also showed you USD/JPY and said that you should watch 110.00 as it looked vulnerable to the topside to me. It’s so far made a high of 110.25 and still looks bid.

Gold had another leg up, and now looks at 1611.50 as the next level. We still think Gold will go materially higher after that and cannot stress enough how it remains a buy on any dip.

Lastly, take a look at EUR/CAD. Its broken the long-term support and that’s despite the BOC saying last time that the door is open to further rate cuts.

Whilst the BOC may be considering cuts, however much the BOC cuts rates the ECB will cut by more. They are now a 1 trick pony, and that’s rate cut after rate cut , more QE and devalue the currency via the old trick of inflation targeting.

Key points for today:

  • Crude is trading above 52.50 resistance, bullish momentum today
  • USDCAD was rejected at 1.3280 yesterday, lower high, looking for a move below 1,3200
  • Gold is really pushing higher, look for dips to be bought


Happy Trading

Erik – Delta1 Trader Technology
 

Delta1trader Technology

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Market Report Friday 21st of February 2020



Dax chart has turned negative and the current tape is also bearish in Nasdaq. It is a shift in the price action over the last 2 sessions and it feels like we could now get a decent move lower.

Gold is really moving higher and holding above 1626 support this morning, the next target is 1650.

A headline out yesterday from China said that caught our eye; PBOC stress test showed that 17 of 30 local banks would fail to meet their capital ratios if the GDP slowed to 4.15%. We reckon it is very likely that Chinese GDP will be around the 4.15% soon. That means default on debt could be a massive factor coming into play.

Overall the current debt spiral is a major risk in our opinion and could well be the next big crisis. Does not look sustainable at all what is going on now with excessive over consumption and increasing debt. That is the reason for the Central Banks are micromanaging the economy and providing lots of stimulus to avoid the stock market to tank, which would trigger a bigger asset pricing slide including potential real estate and other heavy leveraged assets. When investors find out they need to get out of the long positions it will be total panic selling, so Central Banks know that they must make sure investors stay happy with ample supply of cheap money to keep the investment moral up.

Key points for today:

  • Crude was rejected strongly at 54.65 yesterday, should be sell on rallies today
  • USDCAD was rejected at 1.3280 yesterday, lower high, looking for a move below 1,3200
  • Gold is really pushing higher, look for dips to be bought for move towards 1650
  • Dax looks weak ´
  • Nasdaq 100 futures must hold 9511 support to avoid a much deeper sell off
  • US PMI and CAD Retail Sales the main economic releases today




Happy Trading

Erik – Delta1 Trader Technology
 

Delta1trader Technology

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Market Report Tuesday 25th of February 2020



Risk off and more Risk off, total panic yesterday when all the overleverage longs got forced out.

So, what is really causing the sell off? Sudden change is how investors view the impact of the virus and volatility trigger more selling and the move extends. The impact is more psychological, and the market did maybe get overly bullish and just went higher despite of the virus threat being a real issue. In our view, the key in this volatile market is to be dynamic and let the market tell you where it wants to go and avoid being too biased, which can really mess up the trading thinking the market is too low, too high or rational or irrational.

However equity futures is back up this morning, but we need to close a bit higher on a daily basis to change the bearish bias.

Goldman Sachs slashed its US GDP growth forecast to 1,2% from 1,4%, seeing larger drag on the economy from the Corona virus.

The main theme is that the demand for commodities and energy is way down from normal level, leading crude and nat gas lower.

The big problem is also airlines seeing a lot less traffic and flights getting cancelled to certain destination that have Corona virus outbreak. People don’t feel like traveling in this environment when they don’t have to travel. Also seeing a lot of conferences getting cancelled. Tourism will be hit hard. I would also think that Airlines could really get into problems if this virus situation keeps going on for some time. I would also think that people would not rush to buy their airline tickets for the Holiday season until they feel more secure about the virus.

Gold hit a bit of resistance yesterday at 1691 and came all the way down to 1635 overnight, needs to hold 1620 support now to keep the bullish momentum going.

Key points for today:

  • Crude was rejected strongly at 54.65 yesterday, should be sell on rallies today
  • USDCAD was rejected at 1,3320 resistance yesterday, range for now looks 1,3200-1,3320
  • Gold rejected big time at 1691 and moved all the way down to 1635 overnight, key 1620 needs to hold for the bulls.
  • Dax looks weak below 13 492 resistance
  • Nasdaq 100 futures is a sell on rallies 9277
  • Light economic calendar today, CB Consumer Confidence out at 16:00 CET




Happy Trading

Erik – Delta1 Trader Technology
 

Delta1trader Technology

Junior member
29 0
Market Report Wednesday 26th of February 2020



The equity markets are down significantly over the last week and it is moving into some key support on the Nasdaq and S&P500, so I would not rule out a bounce near term. But looking back at February 2018 that looks similar, it could well be more lows after some type of bounce. We expect the volatility to remain in place for some time now, which opens for a lot of good trade set-ups. It now looks like the only trade in town is the Corona virus trade, meaning anything that is positive leads to rally up and the slightest negative comment is making the market sell off hard.

In general, the price action over the last week has been a recovery in Asia trading and sell off at the European open. The moves are quite long in direction, so we don’t need to find the top or the bottom, be patient and with the market to show direction.

Crude oil has broken below 50.58 key support and could now head towards 46 level.

Key points for today:

  • Crude broke key support
  • CAD weak on the back of Crude breaking down. Above 1,3330 resistance it could go much higher
  • Gold rejected big time at 1691 and moved all the way down to 1635 overnight, key 1620 needs to hold for the bulls.
  • Dax looks weak below 13 492 resistance
  • Nasdaq 100 futures is a sell on rallies below 9277
  • Light economic calendar today, no major economic release




Happy Trading

Erik – Delta1 Trader Technology
 

Delta1trader Technology

Junior member
29 0
Market Report Thursday 27th of February 2020

The Corona Virus is the main driver for market volatility and we expect this to remain the case for quite some time as the market is trying to figure out the impact on earnings from the virus. Trump comments overnight did not calm the markets and it was pretty much back on the horse selling the crap out of the equities in Asia and then a slight recovery in early Europe. However the sell rallies mentally is the main driver and it is probably easier to join the sellers than fight them at this stage.
One key thing to keep in mind is that this negative sentiment can take the market much much lower because it is so overleverage on the basis of cheap money. When investors really get scared and have to exit, the flash crash will emerge. We don’t think that capitulation selling has happened yet. Would not be surprising at all to see this moved extend beyond 20% correction in the US equities.
Crude oil has also broken down totally and below 50,58 the next target is 46 handle.
Key points for today:
- Crude broke key support 50,58, next target 46 handle
- CAD weak on the back of Crude breaking down. Above 1,3330 resistance it could go much higher
- Gold rejected big time at 1691 and moved all the way down to 1635 overnight, key 1620 needs to hold for the bulls.
- Dax chart has put in a top
- Nasdaq 100 futures is a sell on rallies below 9037
- Light economic calendar today, US Prelim GDP at 14:30 CET


Happy Trading
Erik – Delta1 Trader Technology
 

Delta1trader Technology

Junior member
29 0
Market Report Monday 2nd of March 2020



The main focus for the markets remains the Coronavirus and the equity markets have trade in a huge range so far today. The market is looking for more Central Bank stimulus to counter the negative impacts of the virus and so far we have not seen enough from the Central Banks to get investors buying back into the markets. The question is of course how far can this market drop? Our take is that it is all down to the psychology of the investors. The way media is covering the virus leads to people getting negative and panicking. I feel that the outcome will not be doomsday and that it will take another few months before things start to improve. How far down we trade ín the meantime is very difficult to say.

Good article in the NY Times on the virus:

https://www.nytimes.com/2020/02/29/health/coronavirus-flu.html



Key points for today:

  • Crude is looking very weak below 50.58
  • CAD got rejected at 1,3450 Friday
  • Gold rejected big time at 1691 last week
  • Dax Futures chart has put in a top, looks weak below 12 461
  • Nasdaq 100 futures is a sell on rallies below 8678
  • US ISM data out at 16:00 CET today, 50.50 is the expectation




Happy Trading

Erik – Delta1 Trader Technology
 

Delta1trader Technology

Junior member
29 0
Market Report Tuesday 3rd of March 2020



We have seen a major rally off the lows in US equities since Friday and 50% of the down move have been reversed on the expectations for further interest rate cuts by the Central Banks. It is again the Central Banks that have to rescue the markets and pump more cheap money in to keep the system afloat. With the big amount of leverage we have now in the financial systems and huge debt it is quite important that assets pricing is supported to avoid a spill over effect into real estate and other leveraged markets. Also keep in mind that the general US middle income person is pretty heavy invested into stocks, meaning that Trump needs to keep the market up to get re-elected. The equity markets looks more supported, however the up move should face resistance just a bit higher from the current price as we have some major resistance levels that should hold on the first test. First test of breakdown level could be a good set up to get short for another down move.



Key points for today:

  • Crude is looking very weak below 50.58
  • CAD got rejected at 1,3450 Friday and back down to test 1,3315 overnight. Looks bullish above 1,3309 former breakout level.
  • Gold rejected big time at 1691 last week
  • Dax Futures chart has put in a top, looks weak below 12 461
  • Nasdaq 100 futures is a sell on rallies below 9037 key resistance




Happy Trading

Erik – Delta1 Trader Technology
 

Delta1trader Technology

Junior member
29 0
Market Report Wednesday 4th of March 2020



The US 10-year Treasury yield hit record low yesterday after an emergency rate cut from the Fed. The market is trading up this morning on the basis of Biden emerging as a front runner for the Democratic Party. It is again the Central Banks that have to rescue the markets and pump more cheap money in to keep the system afloat. With the big amount of leverage we have now in the financial systems and huge debt it is quite important that assets pricing is supported to avoid a spill over effect into real estate and other leveraged markets. Also keep in mind that the general US middle income person is pretty heavy invested into stocks, meaning that Trump needs to keep the market up to make sure to get re-elected. The equity markets looks more supported, however the up move should face resistance just a bit higher from the current price as we have some major resistance levels that should hold on the first test. First test of breakdown level could be a good set up to get short for another down move.



Key points for today:

  • Crude is looking very weak below 50.58
  • CAD got rejected at 1,3450 Friday and back down to test 1,3310 this week. Looks bullish above 1,3309 former breakout level. Bank of Canada rate decision out today.
  • Gold rejected big time at 1691 last week
  • Dax Futures chart has put in a top, looks weak below 12 461
  • Nasdaq 100 futures is a sell on rallies below 9037 key resistance




Happy Trading

Erik – Delta1 Trader Technology
 

Delta1trader Technology

Junior member
29 0
Market Report Thursday 5th of March 2020



US equity Futures trading lower this morning as the rally ran out of steam last night when we could not get above the key resistance levels set earlier this week. The market remains very headline driven, but it seems like we need constant good flows to get the market up. As soon as there is a lack of good news it sells off.

Some headlines out overnight:

OPEC sources: Saudis proposes OPEC+ cuts production by 1.2M bpd but Russia opposes plan; Russia wants group to hold off on new cuts through Q2 – press

China National Health Commission Coronavirus Update for March 4th: 149 additional cases v 119 prior; Additional deaths 31 v 38 prior; Hubei: 134 additional cases v 115 prior; additional deaths 31 v 37 prior
China PBoC reiterates stance to maintain its prudent monetary policy with flexibility; to keep liquidity more ample; property will not be used as means of short-term stimulus to jumpstart the economy

Bank of Canada lowered interest rates by 50bp yesterday. It seems we are on a new round of interest rates cuts from the major Central Banks around the world. US 10 year rates are at the all time lows. We expect the central banks to keep trying to support the markets as much as possible. The key factor is whether the market believes they have enough power in the tank to warrant buying stocks or has the psychology shifted into a sell mode following the virus outbreak?

OPEC seems to have problem to get Russia onboard with the latest plan of production cuts. This is problem going forward and makes it difficult to really seen any strong recovery in oil prices until the Coronavirus fears start to diminish.

Key points for today:

  • Crude is looking very weak below 49.50, sell rallies looks the preferred option for now
  • CAD got rejected at 1,3450 last week, but bounced well from 1,33. Looks bullish above 1,33
  • Gold rejected big time at 1691 last week
  • Dax Futures chart has put in a top, looks weak below 12 461
  • Nasdaq 100 futures is a sell on rallies below 9037 key resistance




Happy Trading

Erik – Delta1 Trader Technology
 

Delta1trader Technology

Junior member
29 0
Market Report Friday 6th of March 2020



The sell off continued both in Asia and Europe, and Wall Street is set for another massive opening drop. 10-year Treasury yield hits new all-time low as coronavirus rocks markets.

Gold prices gather momentum as investors continue to seek for hide outs.

OPEC announced Thursday that it had agreed to impose production cuts of 1.5 bpd from the beginning of next month until the end of the year. This deal is conditional on approval from Russia. The non-OPEC allies are meeting today Friday to decide, if they not agree to the cut, we will end up with a production cut on 1 bpd from OPEC alone. Oil price is plunging hours before the meeting.

All sectors are taking hits with airlines and other tourism-sensitive stocks are taking the worst.

Markets seems to realize that the coronavirus was just the one factor needed to bring it down. High depth, high leveraged positions and now a general slow down of the world markets are not a very promising situation.

Key points for today:

  • Crude is looking very weak below 49.50, sell on rallies. OPEC+ decision might not be enough to bring it back up.
  • CAD got rejected at 1,3450 last week, but bounced well from 1,33. Looks bullish above 1,33
  • Gold rejected big time at 1691 last week, gathering momentum again.
  • Dax Futures chart has put in a top, looks weak below 12 461. Break out bellow today.
  • Nasdaq 100 futures is a sell on rallies.




Happy Trading

Martin – Delta1 Trader Technology
 

Delta1trader Technology

Junior member
29 0
Market Report Monday 9th of March 2020



The official crude selling prices was slashed by Saudi Arabia this weekend and we are now facing a full blood price war between them and Russia. This caused a historical drop in the pricing when the market opened Sunday, Crude Brent Oil was down to $31,36 earlier this morning. Russia says they are happy to live with $25-30 for 6-10 years and there are talks about a coup in Saudi Arabia.

This Oil war on top of the already considerable coronavirus problem the world and markets are facing caused a massive drop on all the European indexes this Monday, lead by oil producers and banks heavily exposed to the energy sector. Sending Europe into bear market territory. Crude has now become a bigger problem for markets than the coronavirus.

Only stocks rising is oil cargo shipping companies as a play towards storage of oil while waiting for better prices.

We are now looking at a full-blown panic selling, with margin calls and vanishing liquidity.

The Energy sector with its enormous debt is now the markets biggest worries. It’s a huge sector with tight bonds to the big financial sectors, pulling everything down with them.

More than 109,000 people have now been infected by the virus and more than 3,700 have died globally, according to the latest figures from the World Health Organization.

The US futures exchanges have reached "Limit Down" which means they turn off pricing and wait for the market to stabilize. However, there is no doubt US stocks will suffer a magnificent plunge when the market opens.



Most markets are down and extremely volatile, sell on rallies.



Happy Trading

Martin – Delta1Trader Technology
 
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