US STOCKS: S&P(ESZ5) - Consolidates Above 6800, Real Gains Seen In Larger Market
The S&P(ESZ5) overnight range was 6817.50 - 6873.25, SPX closed +0.30%, Asia is currently trading around 6863. Risk continued to build on its impressive turnaround from the beginning of the week, with the standout in the price action being the breadth of the market as the Russell Index(+1.91%), Dow Transports(+2.01%) and regional Banks(+1.91%) lead the recovery. The Bulls will be liking this price action as the market consolidates above 6800 before potentially having another run higher into year-end. I remain wary of getting bullish up here, but it's tough to argue with the price action. This morning the futures opened a little mixed, E-minis(S&P) +0.05%, NQZ5 -0.05%. On the day support should again be back toward the 6780-6810 area as the market looks to potentially challenge 6900 again at some point. Only a break back below 6700-6750 would potentially signal a deeper pullback.
- Bob Elliott on X: “The biggest question for the macro economy in the second half was whether the summer surge in demand would translate into better hiring, kicking off a positively reinforcing spending->income cycle. At this point it's pretty clear it has not.” See Graph Below.
- This is one of the reasons the market is beginning to get more confident of a potential rate cutting cycle, together with the potential appointment of Hassett as Fed chair.
- The S&P 500 Index Average True Range(ATR) for the last 10 Trading days: 75 Points
Fig 1: S&P 500 Index Daily Chart
Source: MNI - Market News/@BobUnlimited
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JGB TECHS: (Z5) Tilts Higher
- RES 3: 140.08 High Jun 13
- RES 2: 139.05 High Aug 4
- RES 1: 137.30 - High Sep 8 and key short-term resistance
- PRICE: 135.96 @ 16:10 GMT Nov 3
- SUP 1: 135.61 - Low Oct 08
- SUP 2: 135.39 - 1.618 proj of the Aug 4 - Sep 2 - Sep 8 swing (cont.)
- SUP 3: 134.69 - 2.000 proj of the Aug 4 - Sep 2 - Sep 8 swing (cont.)
Prices started last week well, growing the gap with next support into the 135.61 Oct 08 low. Despite this stability, prices remain inside the firm downtrend that’s dominated prices since mid-September, and prices will need to challenge resistance before signaling any broader reversal. Key short-term resistance has been defined at 137.30, the Sep 8 high. Further weakness would open 135.39 next, a Fibonacci projection.
JGB TECHS: (Z5) Tilts Higher
- RES 3: 140.08 High Jun 13
- RES 2: 139.05 High Aug 4
- RES 1: 137.30 - High Sep 8 and key short-term resistance
- PRICE: 135.96 @ 16:10 GMT Nov 3
- SUP 1: 135.61 - Low Oct 08
- SUP 2: 135.39 - 1.618 proj of the Aug 4 - Sep 2 - Sep 8 swing (cont.)
- SUP 3: 134.69 - 2.000 proj of the Aug 4 - Sep 2 - Sep 8 swing (cont.)
Prices started last week well, growing the gap with next support into the 135.61 Oct 08 low. Despite this stability, prices remain inside the firm downtrend that’s dominated prices since mid-September, and prices will need to challenge resistance before signaling any broader reversal. Key short-term resistance has been defined at 137.30, the Sep 8 high. Further weakness would open 135.39 next, a Fibonacci projection.
US STOCKS: S&P(ESZ5) - Dips Toward 6850 Supported For Now
The S&P(ESZ5) overnight range was 6849.50 - 6909.50, SPX closed +0.17%, Asia is currently trading around 6878.00. The E-Mini’s continue to chop around sideways and seem to bounce pretty hard off the 6850 area for the third session in a row. This morning has seen stocks open slightly lower, E-minis(S&P) -0.05%, NQZ5 -0.10%. The market is clearly in a powerful uptrend, though there are signs of some short-term exhaustion but as of yet no pullback. Lots of chatter about the Fed needing to expand its balance sheet into year-end which could potentially add to short-term liquidity and keep the stock market supported. h/t - @LynAldenContact, Nothing stops this train.
- Andreas Steno Larsen believes “we are on the precipice of a broad-based positive surprise in the economy still”, see graph below showing how easy financial conditions are.
- Joseph Wang points out on X that the “Fed will need to expand its balance sheet by several hundred billion a year, and may start in December to head off year-end funding pressures. A structurally rising TGA and insatiable demand for repo financing leave them little choice.” This could add to short-term liquidity and ease financial conditions even more.
Fig 1: ISM Comp Vs Financial Conditions
Source: MNI - Market News/Steno Research
