Oct 20, 2017 – Market Update (US Senate moving on budget, US jobless claims hitting multidecade low – positive on spending/GDP/inflation/USD, Catalonian bank run, S&P 500 tested the support around 2544/40, Earnings to set the tone for today’s trading, Schlumberger results important for correction in energy stocks)

Mr Price Action/ October 20, 2017/ Market Update, Market Update Posts/ 0 comments

 

Short recap

 

Asia up after some hesitation at the beginning

Europe opening higher

US Senate moving on 2018 budget, next step towards tax reform

US jobless claims hitting multidecade low what means more people working, more money for spending

As consumption is 60% of US GDP, we can see in the future higher GDP growth pressuring up inflation

Merkel positive on Brexit progress but not at the stage to move to trade talks

Catalonian separatists supporting bank run what may send shockwaves across equity markets in Europe

BoJ’s Kuroda – to continue with powerful QE

 

Equities

 

Stocks had a test day yesterday on Catalan risk, speculations about high valuations and weaker earnings

Bias still negative today – a correction before weekend coming? Well, depends on earnings now…

S&P 500 tested the support (now around 2544/40) with resistance between 2573/75

But US Senate move with 2018 budget to reflect positive in today’s session

 

Apple hit by weak demand for iPhone 8

Greek banks PiraeusNational and Alpha looking to sell EUR 5.5 bln of bad loans

Nestle beefing up restructuring cost

 

Earnings

 

Weak in Europe – a strong EUR an issue or what?

Not stellar in US with slow revenue growth – are investors going to punish companies with sell off?

On the other hand low bond vs dividend yields still supportive for equities

 

Today: Daimler (disappointed), GESchlumbergerP&GHoneywell

Energy market will focus on Schlumberger as any disappointment in outlook

Can translate into energy stocks correction that is already sitting on support

 

Little bit of perspective of Black Friday sell off in Oct 1987:

 

Source: Bloomberg

 

Few words as well…  link

 

 

…and back to today’s reality:

If all market participants are buying, there is no bear that can get converted to bull

If it is the case, there are no other buyers left…

 

 

But still some thoughts from Warren Buffett – video (49 min)

 

Bonds

 

10-yr Trys yield at 2.36%

10-yr Bund yield at 0.39%

 

EURUSD – ready to correct big time and trading below parity? Next week’s ECB holds the key as the 2yr Trys-Bunds spread is at extreme  link

 

 

DXY

 

200 WMA at 93.05 critical

 

EURUSD

 

Expiring options at 1.1800 (EUR 1.5 bln), then 1.850-55 (EUR 1.4 bln)

Likely to range 1.1800/50 today unless we get a surprise…

Resistance at 1.1847 (50 DMA), 1.1862 (23.6% Fibo), 1.1880, 1.1910

Support at 1.1800/10 (200 HMA), 1.1787 (Ichimoku), 1.1750, 1.1720 (38.2% Fibo)

 

Source: Saxo Bank

 

USDJPY

 

Supported by higher yields on US budget news

Resistance at 113.43 with stops sitting above 113.50

To test 114.00, then 114.50 but stops above both levels

Exporters can be seen above 113.50

Support at 112.48 (10 DMA)

 

Source: Saxo Bank

 

Gold

 

Resistance at 1289 (10 DMA)

Support at 1281 (50.0% Fibo), 1276 (100 DMA)

 

Source: Saxo Bank

 

Data/events

 

China National Congress (Fri/Sat)

EU Summit (Fri/Sat)

Czech parliamentary elections (Fri/Sat)

BoJ’s Kuroda (0635 GMT)

Fed’s Mester (1800 GMT)

Fed’s Yellen (2330 GMT)

 

Oct 22 – Japanese elections

Oct 26 – ECB

Nov 1 – FOMC

 

 

Should you have any questions feel free to contact me anytime.

 

Good luck Champs!

 

Mr Hawk

 

 

 

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

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