By rVOTtwRRfe STATE OF THE MARKETS
Stocks face headwinds as markets rotate. US stocks erased previous gains as big cap tech and FAANG stocks were liquidated and investors moved to cyclical names. Dow (-0.08%), Nasdaq (-2.47%), S&P (-0.87%) and Russell (-1.95%) were pulled down with technology, consumer discretionary and industrial leading the losses while consumer staples and materials sectors finished with gains. Bonds demand forces yields to slide lower, with the 10Y benchmark at 142 basis points while the Dollar (DXY) continues to be under pressure, below the 96 handle.
In the commodities market, crude was under firm bids after reports of OPEC+ warning to short sellers. The black gold settled around $71.70/bl as New York closed. Gold continues to break higher, back above $1,800/oz at writing as inflation is expected to linger well into 2022. Elsewhere, iron ore surged to $111.20/tn as bidders continue to flood the commodities markets.
In the FX space, Sterling seized the helm of demand in the medium term accounts after markets were caught off-guard with BoE’s surprise hike while Swiss flipped to demand as traders took profits ahead of the weekend. Long term sentiments remained unchanged. On Friday, markets look for earnings reports from Darden Restaurants (DRI) and Winnebago Industries (WGO). Oil traders look forward to reading the reports on Baker Hughes Oil Rig count.
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G8 CURRENCIES SENTIMENTS
| ST | NZD | CAD | EUR | CHF | GBP | AUD | JPY | USD | ST |
| MT | GBP | AUD | CHF | EUR | USD | NZD | JPY | CAD | MT |
| LT | USD | JPY | CHF | GBP | EUR | CAD | AUD | NZD | LT |
** ST refers to Short-Term daily turnover, MT is Medium Term weekly
and LT refers to Long-Term monthly turnover.
WALL ST MOST ACTIVE
| TICKER | LAST PRICE |
% CHANGE |
VOLUME | 90 DAYS AVG |
| SQQQ | 6.50 | + 7.26 | 227,174.3K | 118,615.9K |
| ADGI | 14.18 | + 123.31 | 193,829.1K | 1,732.7K |
| AAPL | 172.26 | – 3.93 | 150,185.8K | 84,266.5K |
| SPY | 466.45 | – 0.88 | 116,016.3K | 73,977.6K |
| T | 23.71 | + 6.95 | 113,480.8K | 42,940.9K |
| F | 20.35 | + 0.79 | 106,361.1K | 81,222.0K |
| KXIN | 1.69 | + 36.29 | 88,852.5K | 2,138.9K |
| QQQ | 386.84 | – 2.57 | 82,123.3K | 44,178.4K |
| VXX | 21.29 | + 4.21 | 79,414.9K | 37,965.5K |
| PFE | 61.25 | + 4.17 | 75,183.6K | 37,183.2K |
** % Change here refer to price
WALL ST TOP FLOWS
| TICKER | LAST PRICE |
VOLUME |
% CHANGE | FUNDS FLOW $ |
| AAPL | 172.26 | 150,185.8K | + 23.70 | 25,871.0M |
| TSLA | 926.92 | 27,590.4K | + 16.74 | 25,574.1M |
| NVDA | 283.87 | 70,736.5K | + 25.46 | 20,080.0M |
| MSFT | 324.90 | 35,034.8K | + 13.19 | 11,382.8M |
| AMZN | 3,377.42 | 3,043.8K | – 12.92 | 10,280.2M |
| AMD | 138.64 | 63,369.5K | + 12.69 | 8,785.5M |
| FB | 334.90 | 22,635.0K | + 6.88 | 7,580.5M |
| ADBE | 566.09 | 10,961.2K | + 197.63 | 6,205.0M |
| GOOGL | 2,888.90 | 1,682.5K | + 7.64 | 4,860.6M |
| PFE | 61.25 | 75,183.6K | + 58.22 | 4,605.0M |
** % change here refers to volume
TOP 5 BLOCK ORDERS
| SYMBOL | PRICE | TYPE | R/VOL | FUNDS FLOW $ |
| 6C | 0.78185 | FX futures/CADUSD | 168 | 13.1M |
| 6L | 0.17250 – 0.78185 | FX futures/BRLUSD | 2K | 48.1M |
| GC | 1,783.00 – 1,792.70 | gold futures | 450 | 80.4M |
| ZF – UB | 120.2850 – 197.2800 | US bonds futures | 22.0K | 278,341.6M |
| CL | 64.45 – 72.90 | crude oil futures | 6.2K | 448.7M |
OUR PICK – No New Picks
No new pick going into the weekend. As markets come to closing in the next two weeks, we expect more profit taking and rotation into cyclicals and commodities as inflation will be one of the theme trades next year. Companies with strong earnings and yields will be preferred and growth investors will come to senses as Feds plan for three hikes in 2022. BoE was smart in heeding the IMF warning to tackle inflation sooner than later, unlike Feds that decided to wait further. Buckle up folks and Happy Holidays!
Trades updates:
Equities: Currently we are holding 8 stocks – 7 longs and 1 short. We are long AUY (22% undervalued) with dividends yielding 3.00%, T (19% undervalued) at 8.77% yields and COG (CTRA) (16% undervalued) yielding 2.49%. CLVS is currently 21% overvalued with -7.19 z-score but Tudor Investment had stepped in recently and we decided to hold. We remain bullish with VIPS (47% undervalued with 5.59 z-score), GT (40% undervalued with 1.28 z-score) and CRON (13% undervalued with 9.18 z-score) while bearish GE (13% overvalued with 1.43 z-score).
FX & Commodities: GBP/JPY has reached all targets and long term turned bullish while GBP/NZD was stopped out. AUD/USD has reached short-term TP1 and remains active.
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| HORIZON | STRATEGY | SL | TP1 | TP2 |
| Short-Term | – | – | – | – |
| Medium-Term | – | – | – | – |
| Long-Term | – | – | – | – |
Risk Disclaimer:
This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities/oz. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Abdul H. Jaffar