October 17 Market Update | Technical, Fundamental, News
Updated
Description:
An analysis for the week ahead.
Points of Interest:
Prior ATH, Poor Structures, $3,500 and $3,370 High-Volume Areas.
Technical:
Broad-market equity indices ended the week higher with S&P 500 retracing more than 80% of its September sell-off.
During Last Week’s Action: Alongside fiscal stimulus hopes, U.S. index products surged past and built value above a major high-volume concentration as initiative participants (i.e., those buying within or above prior value) showed continued confidence to explore higher.
As the week progressed, however, Johnson & Johnson (NYSE: JNJ) suspended its vaccine trials and expectations regarding further stimulus tempered. The weakness was exacerbated by the prior week’s emotional activity which attracted an enormous amount of speculative derivatives activity and left behind poor structures that offer little-to-no support; as the monthly options expiry neared and dealers unwound their hedges, the market endured a quick correction of the poor structure.
Overall, the market remains out of balance and higher. Barring some exogenous event -- such as negative news regarding added stimulus, vaccine progress, and the election -- there is good potential that the market continues exploring higher with an obvious target being, in reference to the S&P 500, the prior all-time-high.
Fundamental:
In its 2020 World Economic Outlook, the International Monetary Fund (IMF) raised its expectations on global growth, but cut long-term forecasts on a slower recovery.
"The scarring is expected to compound forces that dragged productivity growth lower across many economies in the years leading up to the pandemic — relatively slow investment growth weighing on physical capital accumulation, more modest improvements in human capital, and slower efficiency gains in combining technology with factors of production,” the report said. bit.ly/3lU2AG8
Adding, according to Axios, the hard part of the recovery is just beginning; the IMF is urging governments to keep financial lifelines open; "I worry most about withdrawing support to workers and firms prematurely because it could cause a wave of bankruptcies and massive increase in unemployment," IMF head Kristalina Georgieva said during a media appearance.
Key Events:
Monday: Fed Chair Powell Speech, Fed Williams Speech, NAHB Housing Market Index, Fed Clarida Speech, Fed Bostic Speech, Fed Harker Speech.
Tuesday: Building Permits, Housing Starts, Fed Quarles Speech, Fed Evans Speech.
Wednesday: MBA Mortgage Applications, Fed Brainard Speech, Fed Mester Speech, EIA Cushing Crude Oil Stocks Change, EIA Distillate Stocks Change, Fed Beige Book.
Thursday: Jobless Claims, CB Leading Index, Existing Home Sales, Fed Barkin Speech, Fed Kaplan Speech.
Friday: Markit Manufacturing PMI Flash.
Recent News:
Data points to reduction in economic activity on virus restrictions. bit.ly/31dvBVm
Despite the virus, structured finance ratings have remained stable. bit.ly/2FBXdvJ
Bank earnings soar again alongside increasing trading revenues. bit.ly/35clC3I
Delta Air Lines Inc (NYSE: DAL) still burning cash amid recovery. reut.rs/3dAyODq
EU makes 1 billion-euro bet on Gilead Sciences (NASDAQ: GILD) reut.rs/3o2XYiM
BP Plc (NYSE: BP) leaving emerging market oil, but could return. bit.ly/2FBftp0
BlackRock Inc (NYSE: BLK) beat estimates on strong inflows. reut.rs/3o9cHJl
JPMorgan Chase & Co (NYSE: JPM) optimistic on virus recovery. reut.rs/2HiYEQ7
With economy and credit rolling along, Fed unlikely to alter buying. reut.rs/356vFYd
Big technology companies nervousness prompts calls to diversify. reut.rs/3k3NMnQ
U.S. retail sales blow expectations in September amid recovery. reut.rs/3k9faRu
Gulf Coast energy companies restoring oil, gas output post-storm. reut.rs/31dUOij
Caterpillar Inc (NYSE: CAT) is betting on self-driving machines. reut.rs/3dzuuUW
New Apple Inc (NASDAQ: AAPL) iPhone to offer non-material 5G. reut.rs/37gbnxX
Tesla Inc (NASDAQ: TSLA) cut prices of Model S in U.S., China. reut.rs/31feJxm
Used vehicles again lift U.S. consumer prices, but inflation cools. reut.rs/3dEN9yS
U.S. consumers more optimistic about the labor market, says Fed. reut.rs/3nZHS9G
As the globe gallops into vaccine trials, insurers remain unfazed. reut.rs/3lQhgWK
U.K. minister is seeking cash from the Treasury for a no-deal Brexit. reut.rs/2FDpCl7
Despite economic and health crisis, consumers defy expectations. bit.ly/355AaSV
How the market learned to stop worrying and love the blue wave. reut.rs/2H2NpMe
Fed officials calling for tougher regulation to prevent asset bubbles. reut.rs/347wxwn
Citadel Securities has sued the SEC over a new trading mechanism. reut.rs/31j23Wu
Moody’s downgrades U.K. as COVID-19 and Brexit hit debt outlook. reut.rs/2IAGGt3
Newly rated loans from high-yield issues rose for the second month. bit.ly/2T3eu43
Funding to North American startups held steady in Q3 as exits rose. bit.ly/3dCOvtQ
The President does not actually impact the economy as thought. bit.ly/3j9vHUf
U.S. gun sales soar amid pandemic, social unrest, election fears. reut.rs/3o0hYCB
Facebook Inc’s (NASDAQ: FB) Libra tapped an ex-HSBC executive. reut.rs/347yGYX
Trump urges big COVID-19 stimulus, but Mitch McConnell disagrees. reut.rs/3o1hg8f
U.S.’s weakest local economies may face worse from the pandemic. reut.rs/2T3Upe2
G20 pledges to do ‘whatever it takes’ to support the global economy. reut.rs/2HiXl3F
Fed’s Clarida says data 'surprisingly strong,’ but deep holes remain. reut.rs/2Hhkp2J
IEA: Oil producers may struggle to gauge demand amid second wave. reut.rs/2Hhktzv
Moody’s Corporation (NYSE: MCO) sees virus credit losses rising. bit.ly/37ijeLM
Key Metrics:
Sentiment: 34.8% Bullish, 29.5% Neutral, 35.7% Bearish as of 10/14/2020. bit.ly/330VhEp
Gamma Exposure: (Trending Lower) 3,113,195,433 as of 10/16/2020. bit.ly/2UpgtRE
Dark Pool Index: (Trending Neutral) 41.1% as of 10/16/2020. bit.ly/2UpgtRE
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:
Prior ATH, Poor Structures, $3,500 and $3,370 High-Volume Areas.
Technical:
Broad-market equity indices ended the week higher with S&P 500 retracing more than 80% of its September sell-off.
During Last Week’s Action: Alongside fiscal stimulus hopes, U.S. index products surged past and built value above a major high-volume concentration as initiative participants (i.e., those buying within or above prior value) showed continued confidence to explore higher.
As the week progressed, however, Johnson & Johnson (NYSE: JNJ) suspended its vaccine trials and expectations regarding further stimulus tempered. The weakness was exacerbated by the prior week’s emotional activity which attracted an enormous amount of speculative derivatives activity and left behind poor structures that offer little-to-no support; as the monthly options expiry neared and dealers unwound their hedges, the market endured a quick correction of the poor structure.
Overall, the market remains out of balance and higher. Barring some exogenous event -- such as negative news regarding added stimulus, vaccine progress, and the election -- there is good potential that the market continues exploring higher with an obvious target being, in reference to the S&P 500, the prior all-time-high.
Fundamental:
In its 2020 World Economic Outlook, the International Monetary Fund (IMF) raised its expectations on global growth, but cut long-term forecasts on a slower recovery.
"The scarring is expected to compound forces that dragged productivity growth lower across many economies in the years leading up to the pandemic — relatively slow investment growth weighing on physical capital accumulation, more modest improvements in human capital, and slower efficiency gains in combining technology with factors of production,” the report said. bit.ly/3lU2AG8
Adding, according to Axios, the hard part of the recovery is just beginning; the IMF is urging governments to keep financial lifelines open; "I worry most about withdrawing support to workers and firms prematurely because it could cause a wave of bankruptcies and massive increase in unemployment," IMF head Kristalina Georgieva said during a media appearance.
Key Events:
Monday: Fed Chair Powell Speech, Fed Williams Speech, NAHB Housing Market Index, Fed Clarida Speech, Fed Bostic Speech, Fed Harker Speech.
Tuesday: Building Permits, Housing Starts, Fed Quarles Speech, Fed Evans Speech.
Wednesday: MBA Mortgage Applications, Fed Brainard Speech, Fed Mester Speech, EIA Cushing Crude Oil Stocks Change, EIA Distillate Stocks Change, Fed Beige Book.
Thursday: Jobless Claims, CB Leading Index, Existing Home Sales, Fed Barkin Speech, Fed Kaplan Speech.
Friday: Markit Manufacturing PMI Flash.
Recent News:
Data points to reduction in economic activity on virus restrictions. bit.ly/31dvBVm
Despite the virus, structured finance ratings have remained stable. bit.ly/2FBXdvJ
Bank earnings soar again alongside increasing trading revenues. bit.ly/35clC3I
Delta Air Lines Inc (NYSE: DAL) still burning cash amid recovery. reut.rs/3dAyODq
EU makes 1 billion-euro bet on Gilead Sciences (NASDAQ: GILD) reut.rs/3o2XYiM
BP Plc (NYSE: BP) leaving emerging market oil, but could return. bit.ly/2FBftp0
BlackRock Inc (NYSE: BLK) beat estimates on strong inflows. reut.rs/3o9cHJl
JPMorgan Chase & Co (NYSE: JPM) optimistic on virus recovery. reut.rs/2HiYEQ7
With economy and credit rolling along, Fed unlikely to alter buying. reut.rs/356vFYd
Big technology companies nervousness prompts calls to diversify. reut.rs/3k3NMnQ
U.S. retail sales blow expectations in September amid recovery. reut.rs/3k9faRu
Gulf Coast energy companies restoring oil, gas output post-storm. reut.rs/31dUOij
Caterpillar Inc (NYSE: CAT) is betting on self-driving machines. reut.rs/3dzuuUW
New Apple Inc (NASDAQ: AAPL) iPhone to offer non-material 5G. reut.rs/37gbnxX
Tesla Inc (NASDAQ: TSLA) cut prices of Model S in U.S., China. reut.rs/31feJxm
Used vehicles again lift U.S. consumer prices, but inflation cools. reut.rs/3dEN9yS
U.S. consumers more optimistic about the labor market, says Fed. reut.rs/3nZHS9G
As the globe gallops into vaccine trials, insurers remain unfazed. reut.rs/3lQhgWK
U.K. minister is seeking cash from the Treasury for a no-deal Brexit. reut.rs/2FDpCl7
Despite economic and health crisis, consumers defy expectations. bit.ly/355AaSV
How the market learned to stop worrying and love the blue wave. reut.rs/2H2NpMe
Fed officials calling for tougher regulation to prevent asset bubbles. reut.rs/347wxwn
Citadel Securities has sued the SEC over a new trading mechanism. reut.rs/31j23Wu
Moody’s downgrades U.K. as COVID-19 and Brexit hit debt outlook. reut.rs/2IAGGt3
Newly rated loans from high-yield issues rose for the second month. bit.ly/2T3eu43
Funding to North American startups held steady in Q3 as exits rose. bit.ly/3dCOvtQ
The President does not actually impact the economy as thought. bit.ly/3j9vHUf
U.S. gun sales soar amid pandemic, social unrest, election fears. reut.rs/3o0hYCB
Facebook Inc’s (NASDAQ: FB) Libra tapped an ex-HSBC executive. reut.rs/347yGYX
Trump urges big COVID-19 stimulus, but Mitch McConnell disagrees. reut.rs/3o1hg8f
U.S.’s weakest local economies may face worse from the pandemic. reut.rs/2T3Upe2
G20 pledges to do ‘whatever it takes’ to support the global economy. reut.rs/2HiXl3F
Fed’s Clarida says data 'surprisingly strong,’ but deep holes remain. reut.rs/2Hhkp2J
IEA: Oil producers may struggle to gauge demand amid second wave. reut.rs/2Hhktzv
Moody’s Corporation (NYSE: MCO) sees virus credit losses rising. bit.ly/37ijeLM
Key Metrics:
Sentiment: 34.8% Bullish, 29.5% Neutral, 35.7% Bearish as of 10/14/2020. bit.ly/330VhEp
Gamma Exposure: (Trending Lower) 3,113,195,433 as of 10/16/2020. bit.ly/2UpgtRE
Dark Pool Index: (Trending Neutral) 41.1% as of 10/16/2020. bit.ly/2UpgtRE
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.
Note
Updated VPOC List: 
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.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.