It was a net bullish month for US equities, SPX +286pts (8.0%) to 3871, with the Nasdaq comp’ +412pts (3.9%) to 10988. The Dow settled +4007pts (13.9%) to 32732. WTIC settled +$7.04 (8.9%) to $86.53. Copper cooled by -4cents (1.1%) to $3.38. The USD weakened by -66bps to DXY 111.42. The US 10yr yield gained +27bps to 4.10%.
SPX, monthly
A new cycle low of 3491, but a very powerful rebound to 3905, and settling at 3871. A SEVENTH consecutive monthly settlement under the 10MA, and I continue to see the market as m/t bearish.
Nasdaq comp’, monthly
A new cycle low of 10088, but settling +3.9% to 10988. Another lower low and lower high, with a bearish settlement under the 10MA.
Dow, monthly
A new cycle low of 28660, but a rather monstrous swing higher to settle +13.9% at 32732. I’d note the key 10MA at 32625, for what is a ‘marginal’ bullish monthly settlement, not confirmed in any of the other five main indexes.
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WTIC, monthly
Oil printed $93.64, but settled in the mid $86s. The October candle is rather spiky, and is suggestive of s/t bullish exhaustion. I’d note monthly momentum is increasingly negative, and bodes problematic for Nov’/Dec.
Copper, monthly
A seventh consecutive net monthly decline. No clear sign of a floor/turn yet.
USD, monthly
A net October decline of -0.7%, in the scheme of things… its ‘noise’. The 120s remain a valid target.
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US 10yr yield, monthly
A third consecutive net monthly gain, with the US 10yr yield standing at 4.10%. Next natural target is psy’ 5.00, whether before year end… or early 2023.
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Looking ahead
Tuesday will see PMI/ISM manu’, JOLTS, construction, vehicle sales.
Earnings: SOFI, UBER, PFE, BP, MRO, LLY, PSX, NEM, TM, AMD, DVN, ABNB, ET, LTHM, CHK
Event: Day’1 of the FOMC. I’d also keep in mind, a new month brings new money, which leans bullish into Wed’ afternoon.
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Final note
Both bulls and bears have something to claim in October. Now its merely a case of whether you believe we’ve secured a m/t low, or whether we’re just seeing another multi-week bounce, as we’ve seen a fair few times this year.
For the record, I expect lower levels, but even if we do turn down from around mid November… its going to be something of a battle to take out 3491 before the new year.
We’ve just one sixth left of the year. For many… its been difficult, and frankly, I see 2023 as set to be even more so.
Goodnight from London