It was a bearish month for equities, SPX -94pts (2.2%) to 4193, with the Transports -1073pts (7.2%) to 13895. WTIC fell -$9.77 (10.8%) to $81.02. Copper cooled by 9cents (2.4%) to $3.65. The USD strengthened by +90bps to DXY 106.71. The US 10yr yield gained +29bps to 4.88%.
SPX, monthly
A third consecutive net monthly decline. Monthly momentum ticked lower, and will turn negative as of Nov’1st. The October settlement was under the key 10Ma (4253), as the m/t trend has turned bearish.
Downside supports – 4103, psy’ 4K, the March low of 3808, and then the lower monthly bollinger, currently 3623. The latter appears realistic before year end.
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Trans, monthly
A third consecutive, rather severe net monthly decline. Monthly momentum has turned negative. The October settlement was under the key 10Ma (14827), as the m/t trend has turned bearish. Next support is the Sept’2022 low of 11946.
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WTIC, monthly
Printing $91.88, but cooling to $80.74, and settling at $81.02. Momentum remains marginally negative. This month’s decline is especially bizarre, considering the threat of a major escalation in the middle east. I would note the key 10MA ($78s) was still settled above.
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Copper, monthly
Copper declined for a third month. Momentum remains moderately negative. Major support 3.20/psy’ 3.00.
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USD, monthly
The king of FIAT land strengthened for a third consecutive month. Monthly momentum ticked upward, and might turn positive within November. Next upside resistance are the 111s, and then the Sept’2022 114s.
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US 10yr yield, monthly
The US 10yr bond yield climbed for a sixth consecutive month. The intra month high of 4.996% was the highest since July 2007. Momentum ticked upward, and is on the moderately high side. Above psy’ 5.00%, its open air to 7.00%, last printed in 1996.
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Looking ahead
Wednesday will see ADP jobs, JOLTS, ISM manu’, construction,
Earnings: NCLH, CVS, HUM, W, KHC, GNRC, EL, PYPL, ROKU, QCOM, SMCI, SEDG, ABNB, ETSY, MELI, ALB, ELF
Event: FOMC announcement 2pm. Press conf’ 2.30pm
Consensus is for no rate hike.
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I’m burnt out, but there was one extra thing I wanted to highlight that I noticed overnight…
First, keep in mind that m/t rising trend was only broken two weeks ago. We had nine months of upside, yet the Cramer is already looking for the market to resume broadly upward. Its beyond bizarre.
I’m not sure whether he is that stupid, or is merely playing his cheerleader ‘buy buy buy’ role. I kinda lean to the ‘sincere fool’ view, rather than anything particularly corrupt.
In any case, whilst short term price action will always be semi-random chaos, the recent break of m/t trend did merit alarm bells, and shouldn’t be lightly dismissed. Ohh, and to be clear, I will see the market as m/t broken unless >4400 (to be decisive).
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Yours truly is holding a trio of semi-destroyed shorts. My first mistake was holding across the weekend, which I very rarely do. Then I should have exited early Monday. Instead, I’ve now held from the 4120s to 4190s, as compounding mistakes are negating months of gains.
Whilst the s/t setup does favour the bears, it might be mere hours, rather than an ideal 2-3 days. I’ve swung from a new account high on Friday, to being well on the way to being zeroed out. I’ve no realistic hope, and I can’t continue with no hope.
Goodnight from London