Stock Market Stalls: Caution Ahead
Stock-Markets / Stock Markets 2019 Oct 21, 2019 - 12:45 PM GMTBy: QUANTO
Equity markets have once again moved to all time highs esp in the US but action at the top is dicey and looks suspicious.
Key stocks are analysed below and we can see the stall in momentum which is often a harbinger of things to come.
AMZN- Stalling under the 50-day moving average after back testing the up trend line. AAPL - Stalled out all week, flat to Friday's close. FB - Stalling at last months high, trying to bounce off the 50-day moving average but below the trend line. GOOGL - Stalling at resistance NFLX - Stalled and reversed at the channel line. Falling below the 50-day moving average. MSFT - Stalling at resistance, falling below the 50-day moving average today. ADBE - Stalled at the 50-day moving average, falling below the topping pattern neck line.
SPX is just above its daily pivot level.
The lack of buyers at the top is puzzling and thus we are forced to be on the sidelines and watch the action. Our sneaky suspicion is that markets could push higher but will be faced with fierce resistance.
THE eurusd rally on back of brexit resolution means that EU is set to gain nearly 40 billion euros as brexit cost from UK. The fundamental reason could be any but technically the price took support at S1 area of weekly charts at 1.0880. Weekly charts show the bounce area of EURUSD.
However the price action while showed the bounce, the CFTC shorts are still building at least till last tuesday.
Looks as if speculators caught on the wrong foot. Hedge Funds slightly extends their bearish Euro.
US Bakercount
New rig count is falling fast. The sluggish Oil prices have discouraged new investment and is often considered a bad omen for the future economic job creation.
BAML's big data indicator of the U.S. business cycle (recessions & expansions) has moved into 'sub-trend' for the first time in a decade, after having been in 'boom' territory less than a year ago.
Yield story
US 10 Year yield has moved above its near term resistance and neutralised the bearish pressure seen in 2019. However any news shock will ignite a new wave of downtrend and thus forcing FED to cut rates.
US 2 Year yield has moved to pivot level at 1.6% but has not shown the same enthusiasm as the 10 year yield.
Oil Trends
As long as Oil remains 57 pivot level, we remain bearish. A sustained push above 57 is required to neutralise the current bearish trend. The US pull out from Syria is Oil negative because there will be more Oil underpriced transactions by non-opec parties, more smuggling. It will further cut into already falling demand world wide.
Dollar index has broken below 99 pivot level and since then has fallen sharply. Prices now at s2 price support. We will need to be watching for some reaction at this level
AUDUSD moves above daily pivot level 6780 and has ignited a wave of short covering. AUDUSD may have ended its downtrend and could be looking up to 0.72000.
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Source: https://quanto.live/dailysetups/market-stall-caution-ahead/
By Quanto
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