It was a powerfully bullish month for US equities, SPX +297pts (6.9%), with the Transports +1904pts (13.6%). WTIC settled +$8.54 (11.4%) to $83.57. Copper +28cents (6.8%) to $4.37. The USD weakened by -12bps to DXY 94.12. The US 10yr yield gained +3bps to 1.55%.
SPX, monthly
Trans, monthly
WTIC, monthly
Copper, monthly
USD, monthly
US 10yr yield, monthly
Summary
Equities: Early weakness in October, but swinging very powerfully upward. The SPX candle is of the bullish engulfing type. Whilst that doesn’t rule out s/t weakness (not least with an FOMC), it is strongly suggestive that November will see net gains. The Transports was even stronger, as multi-month price structure of a bull flag is playing out.
WTIC: a second consecutive net monthly gain, with oil printing a seven year high of $85.41. With the key $77s cleared, its a case of open air to giant psy’ $100. Whether that is before year end, or in early 2022… is of little real consequence. The related energy stocks are s/t broken, but I’m absolutely m/t bullish. Seeking to buy back OXY, SLB, MRO, RIG, and KMI next week.
Copper: Powerful net monthly gains. Whilst the October candle is distinctly spiky from $4.82, a push above psy’ $5.00 appears very probable before year end. From there, I see the $7s. I’d note the computer’s PF target is a pretty crazy $9.50. Key stocks: FCX, SCCO, TECK, VALE … of which I’d like to buy back FCX in the $35/34s.
USD: the dollar printed 94.57, but is s/t stuck. Momentum is still increasing. Mid term bullish unless the monthly 10MA (92s) is lost… which seems unlikely, as rate hikes are coming in 2022.
US bond yields: a third consecutive monthly gain. The Oct’ candle is rather spiky, ahead of the Fed’s QE taper announcement. M/t bullish yields, and by default… bearish bonds. Natural target for the 10yr yield is 2.25%.
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Dear Subscriber (or guest)
… and that settles October. On any basis, with a quartet of index historic highs (SPX, Dow, Nasdaq comp’, NYSE comp’), it was just another month for the equity bulls.
Yes, there are many threats to the ongoing main market ‘party’, but right now, I have to see any bearish chatter (other than s/t cooling of 2-4%) as just ‘crazy talk’.
Further, to be clear, I do NOT fear the QE taper, although it might be the market’s excuse for a few percent lower. Neither do I fear rate hikes, which are inherently bullish, not least for the financials. Speaking of the Fed…
A net weekly change of -$8.8bn, taking the balance sheet to $8.556trn.
Next Wednesday will see the FOMC announce QE taper. The only issue is whether the plan will to be fully spool down the printers by end Q1, or a more probable end Q2.
Its likely that rate hike expectations will be brought forward. Indeed, many are now expecting rate hike’1 as early as June 2022. If inflation picks up – as appears inevitable, then… maybe March/April.
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Miscell’ things…
The Celente… every day… the nuclear rage grows.
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Dore calling out the mainstream hacks. I especially like the highlight that “we’ll never learn how safe the vaccine is, until we start giving it”. Yeah.. good luck with that.
To you new subscribers (and guests), as I periodically note…
I would die to protect YOUR right to choose what healthcare you want. All I expect is that you don’t try to force your choices onto anyone else.
Ohh, and for the record, MRNA is a type of biotech, as the Pfizer and Moderna treatments are a form of Gene Therapy, still in the experimental phase.
Whilst I’m pro gene therapy, I’ll be damned if I try anything without a DECADE of longitudinal data. Its truly bizarre to see a few billion people blind-fully be part of the biggest experiment in human history.
It remains outrageous that the triumvirate of censorship – FB, TWTR, and GOOGL, won’t even allow the term ‘Gene Therapy’ to be argued. I have to wonder if Trump’s ‘Truth Social’ will be any different, and on consideration… I don’t !
Lets be clear, it was Trump that lead the charge for ‘Operation Warp Speed’. All those outraged at the coercion, the firings, the mandates… did you already re-write your history from 2020? There is no realistic solution to be found on either side of the political aisle. In any case… the Dark Winter ahead will be ‘entertaining’… one way or another.
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The weekend
Its time to rest. I’ve sideline entertainment via Foundation, Gold Rush, and Halloween Kills. If I can find the energy, I’ll cover as many of the individual stock settlements at some point.
As ever, feel free to message me via Disqus or email.
Sincerely, have a restful weekend, and goodnight from London
yours… Philip
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The weekend post will appear Sat’12pm EST @ https://tradingsunset.blogspot.com, and will detail ten of the world equity markets.