September 20 Market Update | Technical, Fundamental, News
Description:
An analysis for the week ahead.
Points of Interest:
Balance Area; Acceptance Below Composite HVN; Numerous Tests Of LVN.
Technical:
Broad-market equity indices ended the week lower with the S&P 500 correcting to $3,280.
Recapping last week’s action, alongside progress in COVID-19 vaccine development, on Monday, participants rejected the prior week's low, establishing value higher on a gap. Ahead of the Federal Reserve's two-day meeting, Tuesday’s session confirmed the upside directional conviction, trading up to a multi-day ledge formed by mechanical sellers. In light of Fed statements, after the ledge proved resistive for two days straight, the market liquidated through Friday’s session, testing and accepting value near a low-volume area that formerly denoted directional conviction to the upside.
Overall, the market’s weakness on economic concerns and acceptance of value below a composite high-volume area, confirms the near-term change in conviction. That said, indices keep testing the low-volume area below $3,320. Acceptance within the low-volume area may foreshadow a test of $3,270, the next-closest high-volume concentration which could slow prices enough to allow responsive longs entry at more favorable prices.
Scroll to bottom of document for non-profile charts.
Fundamental:
Albert Edwards, chief investment strategist at Societe Generale SA (OTC: SCGLY), suggested rapid money supply growth will worsen the deflationary bust.
“Why? The flipside to looking at money supply growth is to look at its counter-parties on the asset side of the banks’ balance sheets. It is clear that the main driver for the recent explosive 25% monetary growth has been bank lending to industrial and commercial companies, which despite only comprising a quarter of total bank lending has contributed some 70% of the total rise in lending over the past year, surging 30% yoy. One thing we now know for sure after Japan’s lost decade: keeping zombie companies alive with “extend and pretend” bank loans creates deflation, not higher inflation.” bloom.bg/3cfrQmF
Simply put, indebtedness and malinvestment will waste resources, thus lowering economic growth prospects.
Key Events:
Monday: Chicago Fed National Activity Index, Fed Brainard Speech, Fed Kaplan Speech, Fed Williams Speech.
Tuesday: Existing Home Sales, Fed Evans Speech, Fed Chair Powell Testimony.
Wednesday: MBA Mortgage Applications, Fed Mester Speech, House Price Index, Markit Manufacturing PMI Flash, Fed Chair Powell Testimony, EIA Cushing Crude Oil Stocks Change, EIA Distillate Stocks Change, Fed Evans Speech, Fed Quarles Speech.
Thursday: Initial Jobless Claims, Continuing Jobless Claims, Jobless Claims 4-Week Average, Fed Chair Powell Testimony, New Home Sales, Treasury Secretary Mnuchin Testimony, Fed Evans Speech, Fed Williams Speech.
Friday: Durable Goods Orders, Fed Williams Speech.
Recent News:
Broad macro backdrop improves; pro-risk and credit are preferred. bit.ly/2FQTev6
Markets, bankers, and analysts are differing on 2021s default rate. bit.ly/2FUA0Vg
Philip Morris International Inc (NYSE: PM) cuts into its leverage. bit.ly/3kv2jc7
Analyzing COVID vaccine pipeline and immunization scenarios. mck.co/3iLYzCE
Labor market recovery stalls as housing market presses ahead. reut.rs/2ZRQqVR
Promise to revive coal thwarted by falling demand, alternatives. on.wsj.com/32MjYWz
Gilead Sciences Inc (NASDAQ: GILD) Immunomedics deal risky. bit.ly/2RIIfqi
Apple Inc (NASDAQ: AAPL) rolls out virtual fitness service. reut.rs/35TzMJi
Alphabet Inc (NASDAQ: GOOGL) faces grilling on ad business. reut.rs/3iZF5dy
Fed will keep rates zero until inflation is on track to exceed target. reut.rs/3iNboMX
General Motors Co (NYSE: GM) to manufacture EV drive systems. reut.rs/3ce7PNc
Hurricane cuts into quarter of U.S. Gulf of Mexico energy output. reut.rs/2ZQXQZa
Fading fiscal stimulus is restraining U.S. consumer spending. reut.rs/32Mq2i3
Nasdaq Inc (NASDAQ: NDAQ) is launching AI-driven AML tech. reut.rs/3iQOEeX
Morgan Stanley (NYSE: MS) believes the trading boom won’t continue. reut.rs/3iQWMMG
Trump announces nearly $13 billion in farm aid at Wisconsin rally. bloom.bg/35RuQV7
Saudi energy minister gives warning to oil market short sellers. reut.rs/3ce9t1v
Moderna Inc (NASDAQ: MRNA) to produce 20 million vaccines. reut.rs/2HiPjbh
Economics and the damage of Financial Transaction Taxes (FTT). bit.ly/33Dcqoc
Kashkari urges big investors to demand banks hold more capital. bloom.bg/35ZfoGm
Trump blesses Oracle Corporation’s (NYSE: ORCL) TikTok deal. bbc.in/3kBe9Sa
Boeing Co (NYSE: BA) 737 MAX returns and backlog risks remain. bit.ly/35R8jHX
Trump to emphasize energy infrastructure buildout in the second term. bit.ly/35OrWk5
Nikola Corp (NASDAQ: NKLA) examined by SEC regarding Fraud. bloom.bg/2EimGd7
UBS Group (NYSE: UBS), Credit Suisse Group(NYSE: CS) to merge. bloom.bg/2ZTtrtA
Sentiment weakens as outlook for the oil market looks more fragile. bit.ly/3hR9Pw6
Key Metrics:
Sentiment: 32.0% Bullish, 27.6% Neutral, 40.4% Bearish as of 9/16/2020. bit.ly/330VhEp
Gamma Exposure: (Trending Lower) 189,695,161 as of 9/18/2020. bit.ly/2UpgtRE
Dark Pool Index: (Trending Higher) 44.2% as of 9/18/2020. bit.ly/2UpgtRE
Product Snapshot:
S&P 500 (ES):
SPY
SPX
Disclaimer:
This is a page where I look to share knowledge and keep track of trades. If questions, concerns, or suggestions, feel free to comment. I think everyone can improve, especially me.
In no way should this post be construed as investment advice.
An analysis for the week ahead.
Points of Interest:
Balance Area; Acceptance Below Composite HVN; Numerous Tests Of LVN.
Technical:
Broad-market equity indices ended the week lower with the S&P 500 correcting to $3,280.
Recapping last week’s action, alongside progress in COVID-19 vaccine development, on Monday, participants rejected the prior week's low, establishing value higher on a gap. Ahead of the Federal Reserve's two-day meeting, Tuesday’s session confirmed the upside directional conviction, trading up to a multi-day ledge formed by mechanical sellers. In light of Fed statements, after the ledge proved resistive for two days straight, the market liquidated through Friday’s session, testing and accepting value near a low-volume area that formerly denoted directional conviction to the upside.
Overall, the market’s weakness on economic concerns and acceptance of value below a composite high-volume area, confirms the near-term change in conviction. That said, indices keep testing the low-volume area below $3,320. Acceptance within the low-volume area may foreshadow a test of $3,270, the next-closest high-volume concentration which could slow prices enough to allow responsive longs entry at more favorable prices.
Scroll to bottom of document for non-profile charts.
Fundamental:
Albert Edwards, chief investment strategist at Societe Generale SA (OTC: SCGLY), suggested rapid money supply growth will worsen the deflationary bust.
“Why? The flipside to looking at money supply growth is to look at its counter-parties on the asset side of the banks’ balance sheets. It is clear that the main driver for the recent explosive 25% monetary growth has been bank lending to industrial and commercial companies, which despite only comprising a quarter of total bank lending has contributed some 70% of the total rise in lending over the past year, surging 30% yoy. One thing we now know for sure after Japan’s lost decade: keeping zombie companies alive with “extend and pretend” bank loans creates deflation, not higher inflation.” bloom.bg/3cfrQmF
Simply put, indebtedness and malinvestment will waste resources, thus lowering economic growth prospects.
Key Events:
Monday: Chicago Fed National Activity Index, Fed Brainard Speech, Fed Kaplan Speech, Fed Williams Speech.
Tuesday: Existing Home Sales, Fed Evans Speech, Fed Chair Powell Testimony.
Wednesday: MBA Mortgage Applications, Fed Mester Speech, House Price Index, Markit Manufacturing PMI Flash, Fed Chair Powell Testimony, EIA Cushing Crude Oil Stocks Change, EIA Distillate Stocks Change, Fed Evans Speech, Fed Quarles Speech.
Thursday: Initial Jobless Claims, Continuing Jobless Claims, Jobless Claims 4-Week Average, Fed Chair Powell Testimony, New Home Sales, Treasury Secretary Mnuchin Testimony, Fed Evans Speech, Fed Williams Speech.
Friday: Durable Goods Orders, Fed Williams Speech.
Recent News:
Broad macro backdrop improves; pro-risk and credit are preferred. bit.ly/2FQTev6
Markets, bankers, and analysts are differing on 2021s default rate. bit.ly/2FUA0Vg
Philip Morris International Inc (NYSE: PM) cuts into its leverage. bit.ly/3kv2jc7
Analyzing COVID vaccine pipeline and immunization scenarios. mck.co/3iLYzCE
Labor market recovery stalls as housing market presses ahead. reut.rs/2ZRQqVR
Promise to revive coal thwarted by falling demand, alternatives. on.wsj.com/32MjYWz
Gilead Sciences Inc (NASDAQ: GILD) Immunomedics deal risky. bit.ly/2RIIfqi
Apple Inc (NASDAQ: AAPL) rolls out virtual fitness service. reut.rs/35TzMJi
Alphabet Inc (NASDAQ: GOOGL) faces grilling on ad business. reut.rs/3iZF5dy
Fed will keep rates zero until inflation is on track to exceed target. reut.rs/3iNboMX
General Motors Co (NYSE: GM) to manufacture EV drive systems. reut.rs/3ce7PNc
Hurricane cuts into quarter of U.S. Gulf of Mexico energy output. reut.rs/2ZQXQZa
Fading fiscal stimulus is restraining U.S. consumer spending. reut.rs/32Mq2i3
Nasdaq Inc (NASDAQ: NDAQ) is launching AI-driven AML tech. reut.rs/3iQOEeX
Morgan Stanley (NYSE: MS) believes the trading boom won’t continue. reut.rs/3iQWMMG
Trump announces nearly $13 billion in farm aid at Wisconsin rally. bloom.bg/35RuQV7
Saudi energy minister gives warning to oil market short sellers. reut.rs/3ce9t1v
Moderna Inc (NASDAQ: MRNA) to produce 20 million vaccines. reut.rs/2HiPjbh
Economics and the damage of Financial Transaction Taxes (FTT). bit.ly/33Dcqoc
Kashkari urges big investors to demand banks hold more capital. bloom.bg/35ZfoGm
Trump blesses Oracle Corporation’s (NYSE: ORCL) TikTok deal. bbc.in/3kBe9Sa
Boeing Co (NYSE: BA) 737 MAX returns and backlog risks remain. bit.ly/35R8jHX
Trump to emphasize energy infrastructure buildout in the second term. bit.ly/35OrWk5
Nikola Corp (NASDAQ: NKLA) examined by SEC regarding Fraud. bloom.bg/2EimGd7
UBS Group (NYSE: UBS), Credit Suisse Group(NYSE: CS) to merge. bloom.bg/2ZTtrtA
Sentiment weakens as outlook for the oil market looks more fragile. bit.ly/3hR9Pw6
Key Metrics:
Sentiment: 32.0% Bullish, 27.6% Neutral, 40.4% Bearish as of 9/16/2020. bit.ly/330VhEp
Gamma Exposure: (Trending Lower) 189,695,161 as of 9/18/2020. bit.ly/2UpgtRE
Dark Pool Index: (Trending Higher) 44.2% as of 9/18/2020. bit.ly/2UpgtRE
Product Snapshot:
S&P 500 (ES):
SPY
SPX
Disclaimer:
This is a page where I look to share knowledge and keep track of trades. If questions, concerns, or suggestions, feel free to comment. I think everyone can improve, especially me.
In no way should this post be construed as investment advice.
This is a page where I look to share knowledge and keep track of trades. If questions, concerns, or suggestions, feel free to comment. I think everyone can improve (myself especially), so if you see something wrong, speak up.
