Delta1trader Technology - Daily Market Report

[Delta1trader Technology]

Market Report Tuesday 10th of March 2020



Oil bouncing a little bit this morning, but we need to close above the 34 key level to stabilize. Was playing around with numbers this morning and if a 30% drop in the oil price would translate into USDCAD moving up 30%, it should be trading at 1.70. Probably will not go that high, but just a reference point and I think there is move potential upside in that pair.

Russia says that they have not ruled out measures with OPEC to stabilize oil markets.

US equity futures up this morning, but I expect it to run into selling pressure as we have not been able to hold any rally in the last week basically. Remains a sell rally market looks like.

With reference to the Corona virus it looks apparent to me that the lack of testing is causing a big underreporting of the amount of cases in the US.

The credit market is sensitive to moves in oil because a very large portion of high-yield bonds in US are issued by companies involved in energy. Some US shale producers are a on the brink of bankruptcy and that can have a ripple effect on credit markets.



Key points for today:

• WTI Crude oil weak below 34 resistance on daily chart
• USDCAD bullish above 1.3510 support. Resistance at 1.3750 for now.
• Nasdaq looks like a sell on rallies below 8400
• Gold bullish above 1630 support, key res at 1700, need a daily close above 1700 to get this moving higher

Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Wednesday 11th of March 2020



Kudlow says the White House is working on economic package, will outline a more detailed package soon. Trump wants to waive payroll tax through late 2020. Biden took a big step towards Democratic nomination. This gave a strong rally before close of US markets last night, all indexes closed at around 5%.



BOE cut Interest Rates by 50bps to 0,25%, ECB’s Lagarde warned that Europe risked a major economic which like the financial crisis unless leaders acted urgently on the coronavirus. European indices opened higher and is still in the positive territory. All equity sectors are higher with Financial on top. Shipping companies with oil tankers keep trending up as the market is sweeping for storage.



Oil had a spike up but has suffered a plunge through the night and morning. Crude Brent Oil is now trading at just above $36 and Crude WTI Oil at $33,5, down 4-5% for today. Not able to establish a true re-bounce as the oil price war between OPEC and Russia continues. As for now none of the warriors are blinking and the markets are not willing to take on more risk, sending oil price down in a negative sediment. Market needs to se one of them taking the initiative to get back around the negotiation table, the opposite is now happening as Saudi is ramping up their production. Risk is on the downside as the war continues without any positive signals from OPEC or Russia.



US futures is pointed to steep losses in the open and we are looking at another volatile session on Well Street as the numbers of coronavirus cases around the world keeps rising.





Key points for today:

• WTI Crude oil weak below 34 resistance on daily chart, rejected and sell on rallies.
• USDCAD bullish above 1.3510 support. Resistance at 1.3750 for now.
• Nasdaq looks like a sell on rallies below 8400.
• Gold bullish above 1630 support, key res at 1700, need a daily close above 1700 to get this moving higher.

Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Thursday 12th of March 2020



Last night, Trump announced travel restrictions to the US from Europe starting Friday. The markets sold off immediately. The virus is a real issue at the moment, however the key seems to be to avoid the infection rate to spike too high, because the amount of people dying is rather low. The biggest risk right now is total economic meltdown, which would be a much bigger risk to the total economy than the amount of people dying so far. Just a quick not, the virus has killed about 5k people worldwide so far and the net population increase only today is 110k so far. It may sound harsh, but the world will always face issue and problems. Right now, the impact of this virus measures is causing a massive fallout in the markets and the spending will be impacted in a big negative way, meaning that it will be followed by a spiral of bankruptcies. The markets need more rate cuts and liquidity and tax benefits to get through this downturn. Also keep in mind the private debt is very high in many Western countries right now and a problem like this would trigger the default rate going through the roof. Lagarde is calling for coordinated efforts, but no one seems to be backing her up at the moment, wake up Central bankers, need some action fast. If this gets much worse in the markets the economic implications will huge.

Is the gold long trade getting too crowded? Gold is looking a bit weak up here, failing at 1700.





Key points for today:

• Crude oil weak below 34 resistance on daily chart
• USDCAD break above 1,3800 seems to be holding the pattern of bull rally.
• Nasdaq looks like a sell on rallies below 8400
• Gold bullish above 1630 support, key res at 1700, need a daily close above 1700 to get this moving higher. A break below 1630 could cause massive liquidation of longs.

Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Thursday 13th of March 2020



United States

U.S. stock futures were volatile in early morning trading, after the major averages on Thursday suffered their worst session since the “Black Monday” market crash in 1987. The futures have now turned around and are pointing to solid opening gains.



Europe

Europe has a re-bounce today sending Euro Stoxx 50 up 3%. Energy and Utilities sectors performing stronger.



Oil

Brent Crude Oil price is in positive terrain today trading above $35 after yesterdays plunge, but no known positive moves in the price war will keep the price low. If the oil price war lords continue to prepare for higher production and don’t get back to the negotiation table these price spikes will be used for selloffs. US shale producers are one of the biggest losers in this with bankruptcy just around the corner.



Summary

However, the volatility is extreme, and the uncertainty will continue to shake the markets for some time until the world sees a stabilization of the coronavirus and a demobilization in the oil price war.

Equities, indices and oil – sell on rallies.

Key points for today:

• WTI Crude oil weak below 34 resistance on daily chart
• USDCAD break above 1,3800 seems to be holding the pattern of bull rally.
• Nasdaq looks like a sell on rallies below 8400
• Gold bullish above 1630 support, key res at 1700, need a daily close above 1700 to get this moving higher. A break below 1630 could cause massive liquidation of longs.

Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Monday 16th of March 2020



United States

After a strong close last week all the US Futures hits limit-low as the futures market opened Sunday evening, staying at the limit as we are half way in Europe trading session and closing in to the markets open in US. FED blasted its monetary bazooka, slashing benchmark interest rate to zero and launching a new round of quantitative easing. Boosting treasury holding by at least $500 B, MBS by $200 B. However, this does not seem to calm the markets yet and we are facing another market plunge today.

Europe

Despite several states economic rescue packages all over Europe the markets continue to fall, S&P 500 is down 8-9% today. Financials sector taking the bottom race lead with a fall more than 10% today. Markets are worried about mass bankruptcy and the sell-off continues.

Oil

The oil price war continues at full strength overflowing the markets with oil, Brent Crude oil price went straight through last weeks floor at 31,28. WTI Crude oil price closing into the same floor as the price keeps plunging. Oil tankers rates continue to rise as the market is swiping for tonnage to transport and storage.

Summary

Last week’s volatility continues with trading limit being triggered, stopping any active trading in the futures market. We expect new limits will be reached once the US equities market opens, make sure not to be trapped in these when the markets are closing in.

Equities, indices and oil – sell on rallies.


Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Tuesday 17th of March 2020



United States

US Futures are pointing to a bounce when the markets open today following the DJI average’s third-worst day ever. After yesterday’s market close the futures market has been very volatile and all three US indexes Futures triggered their upside limit earlier in today. Trump promised last night that US will be powerfully supporting those industries, like Airlines and others, that are particularly affected by the virus. Yesterdays market lows might set a floor for now, a however weak one, but even with markets coming up today we expect markets to be extreme volatile and in best case sideways for some time.

Europe

All European markets are slightly down today mid trading session, continuing the decline from yesterday. S&P Euro is down around 1,2%, all sectors are down except Materials which is slightly up.



Oil

The oil price keeps its volatility alongside equities markets and Brent Crude oil is now in a trading range at $29,5 - $31. WTI being slightly less volatile and seems to have a lower floor around $29. Saudi Aramco said it would likely continue with a planned oil production hike from April into May, suggesting it was “very comfortable” with an oil price of $30 a barrel. The oil price war front between OPEC and Russia seems to remain for now.



Summary

Markets continue with a record high volatility triggering trading limits, but we might have seen the worst sell-off rallies for now. Investors which are not wiped out by this market crash might start to carefully push the buy-button at these levels and we will see the markets starting to hold again. Most states all around the world seems to recognize their responsibility to save the markets with every tool in their toolbox.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Wednesday 18th of March 2020



United States

Last night’s negative trading session in Asia sent Europe down in today’s session and US Futures hit limit down halt, amid unprecedented volatility from coronavirus crisis. Wall Street continue to be an unprecedented roller-coaster ride with its extreme volatility swinging the markets in all directions crushing every good calculated guess for a direction. There is none.

Europe

As mentioned above European markets followed Asian markets down, S&P Europe is down 5% mid trading session. All sectors are down with Industrials as the worst and Telecom as the best performing.



Oil

The price floor which seemed to evolve around $30 for Brent Crude oil was not very robust, as predicted, and is now trading at the January 2016 low for $27,7. However, at these levels we believe the downside to be even more limited, but any bigger positive moves will be absent as long as there is no positive moves in the oil price war. The coronavirus lockdown is decreasing the oil demand as well.



Summary

Roller-coaster markets continue its ride intraday and on a day-to-day basis. However, as mentioned earlier we believe the biggest sell-off pressure is losing its momentum for now and long-term positions starts to build on these levels.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Thursday 19th of March 2020



United States

Yesterday’s session was another negative day with new lows and markets closing slightly up from the very bottom. US indices ended down 4-6%. Treasury yields rose 22 basis points to 1.18% following a rise of more than 30 basis points on Tuesday as it rebounds from record lows. Senate is expanding paid leave and unemployment benefits in response to the virus as a part of what’s expected to be a whopping governmental response to avoid downturn.

Futures are this morning pointing down for a negative open at 0,8-2% at S&P500, DJI and NASDAQ.



Europe

European markets are not trading at any specific direction today as the S&P Europe is slightly up for the day at 0,3%. Energy sectors are slightly rising after yesterday’s absolute slaughter in the oil price, Telecom is still preforming well compared to others as investors believe the companies will be able to benefit from the rising usage of mobile data and internet in general. ECB €750B bond program bring relief to yields and spreads in the region.

Less liquid and oil corresponding currencies being hit hard, investors seeking to safer havens as USD.



Oil

Yesterday was an absolute massacre of the oil price as the oil price war carries on and there is an absolute absent of liquidity in the market. Brent Crude Oil spot price was dumped to $24,3, futures contracts bouncing up today. Both OPEC and Russia keep their positions and we believe the oil market will be crushed until their next meeting in June unless one of them seeks back to the negotiation table.



Summary

The markets have been on an unprecedented roller-coaster ride amid the coronavirus turmoil, reinforced by lack of liquidity and pure fear. However, as mentioned in earlier reports it seems like the worst downturn is behind us for now as the states tries to support the markets with bond programs and long-term investors which are not wiped out start building positions again.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Friday 20th of March 2020



The market remains very fragile and it looks like any recovery is still an opportunity to sell into in the equities and Crude oil. The market needs to see more direct financial support to businesses to avoid a bankruptcy spiral and the amount of Corona cases in Europe and the USA to flatten out or fall, before we get a meaningful recovery. It also seems that the commercial mortgage market in the USA in on the brink of collapse, which undermines the risk of a bankruptcy spiral that would be causing shock waves across multiple markets as bank would get big increase of defaults.

In the FX market the volatility continues to rise, and we had a huge fallout in the Norwegian Krone yesterday on a massive stop loss move as NOK moved to all-time lows across a multiple of currencies. It still seems that the USD should perform decent as long as the risk off environment is dominant.

Crude oil is up this morning on what is looking like a front running of the news the that US will buy crude for the Strategic Oil Reserves. We really need to see an OPEC deal to get this to close above 30 USD per barrel in my opinion.

Equities are also higher on risk buying across the board this morning; however, it looks difficult to move much higher until the imminent risks discussed above has been really addressed.





Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Monday 23rd of March 2020



United States

Sunday open sent US Futures straight down to a limit low, but has made it way slightly up in the mid trading session of Europe indicating a open at around 3% lower than Friday close. This after Washington failed to agree about an economic stimulus and rescue plan Sunday. However, we believe the Senate to come to an agreement within the next 24 hours. The package is said to ending up being worth between $2-4 trillion, markets awaiting the outcome after stocks suffered their biggest one-week decline since the financial crisis on 2008.



Europe

European stocks are trading lower today sending S&P Europe down 3.7% mid trading session, trading at last Wednesdays low. Markets are widely down across all sectors, Industrial sector worst preforming at down 5.5%. Increasing numbers of Coronavirus-affected people, both deaths and infected, across countries continue to contribute to the negative sentiment.



Oil

Market opened Sunday sending the Brent Crude oil price down to a new low at $24.70 but has obtained some of the fall through the night. Now trading at $25,70. The sentiment continue bearish as the oil price war stands its ground and each day there seems to be yet another trapdoor lying beneath oil prices and we believe expect to see prices continue to roil until a cost equilibrium is reached and production is shut in.

Summary

Investors are waiting on Washington to agree to an economic stimulus and rescue plan, oil keeps tumbling and Coronavirus numbers continue to rise – markets will continue its volatility. As mentioned last week equities seems have seen the worst hits for now, but oil is still a sell on rallies and USD continue to be the preferred safe haven. Any substantial rise in equities markets will be unseen until the world gains control on the Coronavirus.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Tuesday 24th of March 2020



United States

Monday US 2 of 3 major indices ended down, DJI and S&P500 took both a fall at 3% from Friday close and NASDAQ ended slightly up 0.18%. Tuesday all three indices hit limit up in the pre-market futures trading. Stocks hardest hit by the shutdowns resulting from the coronavirus led the gains in premarket trading. Market expecting Senate to close a deal on a >$2 trillion stimulus bill any time now which could trigger some relief for the investors, any further delays to the stimulus bill would most likely send the markets back down.



Europe

Mid trading session all European markets and sectors are in positive territory with S&P Europe up 5.3% today. Energy sector is the biggest contributor to the gains in the markets up 11% driven by higher oil price. Markets continue to watch the coronavirus development in the region and whether all the sanctions are working as expecting, taking down the development of people with symptoms or proven virus infection.



Oil

The volatility continues in the world’s biggest commodity and the oil price has gained back its massive loss yesterday, Brent Crude oil currently trading at $28 and above Friday close. As the overall market sentiment grow more positive to a control of the virus outbreak it contributes to the commodity price as well. However, we do not expect the oil price to get back in pre-corona territory straight away. The worlds consumption of oil will be lower as the demand is driven down by slower growth, especially in China. And the oil price war with higher production rates at the same time will obviously continue to destroy the oil market as long as it holds on.



Summary

As mentioned yesterday investors are overall waiting for the US stimulus package to be agreed on, the sentiment seems to be more positive now for a deal very soon. This US economic stimulus and rescue package could help the markets to reinforce the lower floor for now and maybe give some relief to investors. However, it is the development of the coronavirus and its long term effects to the companies which will be the main thing the market is pricing.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Wednesday 25th of March 2020



United States

US stocks had a historic rally yesterday and futures for all three major US Stock indices are pointing up 1-2% today 3 hours before market open. The futures move came after Senate finally agreed on a massive $2 trillion coronavirus stimulus bill, sending some optimism to Wall Street. However, we don’t believe this to be enough for a market recovery, it will only act as a market stabilizer. Only an improvement of the coronavirus-situation and world getting back to more normal operations would send markets to recovery. Nobody knows how the world will look like after this, it all depends on the time we stay in shutdown and halting the world markets.

Europe

Europe over all followed yesterdays strong session in US and Asia in its first half of trading session but has now turned into a falling curve again. The S&P Europe is still in positive territory up 0.8% for the day. Consumer Discretionary as the most gaining sector for the day.



Oil

As predicted and still counting the oil price continue to be extremely volatile. Brent Crude oil is currently trading at $26.40 back from yesterdays highs at above $28. The commodity is now constructing a trading corridor at $25-28 after the masse price fall earlier this month. A best-case scenario for now would be the floor around $25 holding, but no bull rally as long as the oil price war and coronavirus-situation is present.



Summary

The US stimulus package is now agreed on and the market sentiment seems to be more positive for now, preventing or at least weaken any further major losses in the equities markets. Coronavirus-situation is still the key and markets are awaiting an improvement before any price recovery. How strong the recovery will be depending on the length of this world lockdown. This is obviously damaging many companies and markets badly, making losses greater for every day.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Thursday 26th of March 2020



United States

US markets continues its volatility and indices lost their momentum into yesterdays close, DJI ending up 2,39%, S&P 500 up 1,15% and NASDAQ down 1,11%. Futures tied to the three indices are pointing towards a slight fall between 0,5 and 1% when markets open in 2 hours. Investors brace for an expected record spike to the US national weekly initial jobless claims data being released today. Trump pushing to take back the country to more normal operations as soon as possible as this lockdown is crashing the economy more for every day.



Europe

All sectors in European markets are trading lower at todays session, S&P Europe taking a drop at 1,79% mid trading session. Energy sector is again dragging the markets down with a drop of 3,89% as the oil price falls, Consumer Staples best performing with a loss of 0,84% for the day. Coronavirus-situation is still concerning markets as numbers keep increasing across the world.

Oil

Volatility continue to be extremely high in the commodity as already well known, for the same reasons as earlier. Brent Crude oil is currently down 1,45% for the day.



Summary

The US stimulus package is now agreed on and the market sentiment seems to be more positive for now, preventing or at least weaken any further major losses in the equities markets. Coronavirus-situation is still the key and markets are awaiting an improvement before any price recovery. How strong the recovery will be depending on the length of this world lockdown. This is obviously damaging many companies and markets badly, making losses greater for every day. Today’s US weekly jobless claims data is expected to be a huge number of 1.64M today. The expectations are all over the place with CITI expecting 4m, UBS at 800k, and Goldman at 2m. So maybe something of less than 1.5m could be positive. The bottom line for the markets at the moment is really how long the Corona virus lock down will last. Will it be for a few more weeks or will it last until the summertime in some form? I think that the US cannot afford to run a lock down for more than 2 more weeks, after that the economy will start to see major fall outs and bankruptcies. I think Trump will try to avoid this scenario at all cost, he needs the economy to survive in decent shape going into the US elections later this year.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Friday 27th of March 2020



We expect some profit taking in the USD today given the recent days sell off. Next week’s US non-farm payrolls is expected to be really bad and that is causing the recent USD selloff together with increased Corona virus cases in the US. The Fed stimulus is also a driving factor for weaker USD. The Fed is basically looking to support equities and drive interest rates and the USD down. That is the driving factor behind the strong Gold prices of late. The move higher in the US equities yesterday ran into the key resistance area and it was not able to really break above that. So, I am thinking that the normal reaction this morning for US equities would be to test lower and try to find a level where buyers would be interested to get in to try and rally the market up towards the high last night and break higher. The other scenario would be more of a downtrend day. It looks like there is still a bit too much uncertainty around the timeframe and impact of the Corona virus to get the market to rally much higher at the moment.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Monday 6th of April 2020



For the first time in 3 weeks, the US equities, didn’t gap lower at the Asian open. It seems that the US Senate is trying to put together a package to help the Airlines, which is putting a bid into risk at the start of the week and also helping Crude recover in Asia following the over 2 USD per barrel gap lower after the virtual OPEC meeting has been delayed until Thursday, following inability by Saudi and Russia to come to the table. I am hearing that jet fuel demand is down 75% following the halt in most Airline services. Some positive news on the Corona virus, Italy levelling out the amount of new cases and death toll is slowing a bit. However, I am thinking that we need to see a week of improving data to really make any big difference in the sentiment. It looks like the next couple of weeks will be absolutely key with regards to the risk sentiment pricing. To me it looks like the market is pricing for a return to normal activity in the next 4-6 weeks in the US. Any news that would delay that outlook would likely be negative for the equities. I am also a bit concerned for the implications of a possible bankruptcy spiral kicking in, in the next 2-3 weeks. Don’t think most businesses are able to sustain for very long without much cash flow, especially in the Travel industry. Who will book any Holiday’s in the next 6 months? probably not many.



The Nasdaq futures saw a triple bottom end of last week and have now broken above the neckline, meaning bullish above 7660 today. Key resistance around 7885 and 8000.



Gold see key support at 1625, which needs to hold to open for a move higher towards 1675 resistance, which has failed twice over the last couple of weeks. Swiss refineries are set to open again this week, so will be interesting to see if that has any impact on the price.



Happy Trading

Erik – Delta1Trader Technology