VIX Futures:My thinking here, with the current drop (last 24 hours), Equity puts are cheap enough to protect the down side. Market Internals:Strong the entire day https://twitter.com/user/status/1314299171143380992 CONCLUSIONSellers not interested at current prices, thus price will start a new discovery phase, of course I can not know how long it can last. Most likely NEWS…
Is this a Seller Market?
Last night, I shared on twitter the ASIAN Stock Indexes performance for the Month and YTD. Now, I want you to recall the NYTimes article from 2018 where it described the overnight SP500 performance since 1993
If we connect those two together, it is important to note that there is a posibliity that a significant % of that performance came from the Asian Markets doing great! This year so far only China and Taiwan are positive. Of course China is the significant. Key equity markets from around the world are not doing as good YTD as SP500 (4.5%), NQ Composite (26%) or NQ100 (32%). On the other and the Dow Jones is -2.5% YTD. Data as of the closed of yesterday Oct 1, 2020.
The equity flows are mainly negative in North America, Europe and Asia this year and the US markets are positive, this is rare, but is is what we have in 2020.
The key question is, will this selling last?
I have read from analyst that key stocks are doing the heavy lifting.
For New Week (Refinitiv Data)
• Due on Tuesday, U.S. trade deficit in August is expected to widen to $66.2 billion. It had jumped to a 12-year high of $63.6 billion in July, driven by a record surge in imports. The Job Openings and Labor Turnover Survey, or JOLTS, for August is also due on Tuesday. Job openings, a measure of labor demand, jumped to 6.618 million in July. Consumer credit, expected on Wednesday, is expected to rise to $14.30 billion in August from $12.25 billion in July. Data for initial claims for state unemployment benefits is scheduled for release on Thursday. Initial jobless claims for the week ended on Oct. 3 are expected to jump to 823,000 from 837,000 in the week before. On Friday, wholesale inventories for August is expected to rise 0.5%, after a similar increase in the month before.
• The Federal Open Market Committee is due to release the minutes from its September 15-16 policy meeting on Wednesday.
• On Wednesday, U.S. Vice President Mike Pence and Democratic vice-presidential nominee Kamala Harris participate in the vice-presidential debate. The debate at the University of Utah in Salt Lake City will be moderated by Susan Page of USA Today.
Today the Dollar outshining gold, beating yen in battle of safe havens
The flows for equities across the globe is not strong however US Stocks did not trade lower this week.
Here you can see that the SP500 trade to almost a -4% for Sep 2020. Historically this is a weak month for stocks.
We saw VIX increased but nothing compare to what we can see a few weeks from now. Some Brokers are sending emails telling the market that we can see about 40% increase in margin for futures trading.
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…3 negative weeks in a row is a rare event.
My main model closed significant market exposure today. A Weak USD, and Asian and European Equity markets help S&P 500 this week.
The SPX charts shows that we had the third negative week in a row. Since 2016, I can only see two more times this pattern. It is rare and worth to take into account.
Currently, we are near the high before the large drop during Q1 2020 with both (weekly and daily) regression lines broken to the down side. Take a look to the chart.
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