By MFM Team STATE OF THE MARKETS
Dollar surged on haven demand. The last few days of continuous deterioration in sentiments has finally sent the Dollar past the 97.00 barrier. US stocks lost bids with Dow (-0.02%), Nasdaq (-1.40%), and S&P (-0.54%) including Russell (-2.29%) in bearish territories while demand in bonds were noted. Yields were lower with the longer 30Y falling to 2.09%, 10Y to 1.8%, 5Y to 1.66% but the shorter 2Y was sold off, sending its yield higher to 1.19%, near the pre-pandemic levels.
In the commodities market, crude was little changed at $86.75/bl as markets weigh demand and geopolitical risks in Russia-Ukraine tension. Dollar strength sent both gold and iron ore lower, with the yellow metal falling below the $1,800 mark while ore fell back to previous support at $129.40/tn.
In the FX space, safe-haven demand was evident as King Dollar advanced further in the long term accounts while reigning with Yen, Swiss and Sterling in the short and medium term accounts.
On Friday, markets look for earnings reports from Caterpillar (CAT), Chevron (CVX), Charter (CHTR), Colgate-Palmolive (CL), Phillips 66 (PSX), and LyondellBasell (LYB) as well as personal consumption expenditure (PCE) and consumer sentiments.
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G8 CURRENCIES SENTIMENTS
| ST | USD | JPY | GBP | CHF | EUR | CAD | NZD | AUD | ST |
| MT | USD | JPY | CHF | GBP | EUR | CAD | AUD | NZD | MT |
| LT | CAD | GBP | USD | CHF | JPY | EUR | 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 |
| TQQQ | 51.56 | – 2.99 | 161,269.0K | 99,163.2K |
| SPY | 431.24 | – 0.49 | 149,562.2K | 85,622.6K |
| AMD | 102.60 | – 7.33 | 125,829.1K | 57,854.3K |
| AAPL | 159.22 | – 0.29 | 120,802.6K | 90,382.2K |
| VXX | 24.49 | + 0.70 | 120,600.9K | 49,395.5K |
| UVXY | 18.65 | + 1.19 | 112,597.1K | 55,135.8K |
| F | 19.55 | – 1.81 | 105,500.8K | 101,401.0K |
| QQQ | 341.10 | – 1.01 | 94,835.2K | 56,582.9K |
| XLF | 38.22 | – 0.91 | 91,470.9K | 61,329.6K |
| INTC | 48.05 | – 7.04 | 89,573.7K | 31,909.7K |
** % Change here refer to price
WALL ST TOP FLOWS
| TICKER | LAST PRICE |
VOLUME |
% CHANGE | FUNDS FLOW $ |
| TSLA | 829.10 | 48,863.5K | + 66.03 | 40,512.8M |
| AAPL | 159.22 | 120,802.6K | + 24.76 | 19,234.2M |
| MSFT | 299.84 | 53,388.0K | + 20.56 | 16,007.9M |
| AMD | 102.60 | 125,829.1K | + 63.78 | 12,910.1M |
| NVDA | 219.44 | 57,240.8K | + 12.78 | 12,560.9M |
| AMZN | 2,792.75 | 3,868.3K | + 6.12 | 10,803.2M |
| NFLX | 386.70 | 24,306.2K | + 127.91 | 9,399.2M |
| FB | 294.64 | 21,600.8K | + 6.06 | 6,364.5M |
| INTC | 48.05 | 89,573.7K | + 120.76 | 4,304.0M |
| GOOGL | 2,580.10 | 1,597.9K | – 12.06 | 4,122.9M |
** % change here refers to volume
TOP 5 BLOCK ORDERS
| SYMBOL | PRICE | TYPE | R/VOL | FUNDS FLOW $ |
| IAA | 42.28 | equities | 96.58 | 66.1M |
| AFRM | 51.01 | equities | 92.46 | 903.6M |
| RY | 128.76 | FX futures/EURJPY | 966 | 108.2M |
| ZF/N | 118.2650 – 127.2650 | US bonds futures | 40,900 | 497,957.9M |
| CL | 84.20 – 88.06 | crude oil futures | 942 | 80.9M |
OUR PICK – No New Pick
No new pick going into the weekend. We believe the Dollar surge is just stop hunting as the upside volume is light. Average volume for December, when it was trading within the 96.80 – 95.60 band was around 58k while the recent surge past the 97 mark to 97.20 barrier was only 51k. However, the geopolitical risks in Russia-Ukraine tension could elevate Dollar demand in the near term. We expect DXY to pull back and we shall see if there is any support at 96. If there are volume spikes in the 97.20 – 97.00 band, and later no support at 96, we expect Dollar to resume its long term motive.
Trades updates:
Equities: Currently we are holding 8 stocks – 7 longs and 1 short. We are long AUY (20% undervalued) with dividends yielding 2.88%, T (14% undervalued) at 8.58% yields and COG (CTRA) (17% undervalued) yielding 2.47%. CLVS is currently 24% overvalued with -8.20 z-score but Tudor Investment had stepped in recently and we decided to hold. We remain bullish with VIPS (46% undervalued with 5.98 z-score), GT (38% undervalued with 1.40 z-score) and CRON (20% undervalued with 9.18 z-score) while bearish GE (13% overvalued with 1.43 z-score). We have also locked profits for GE, GT and CTRA.
FX & Commodities: We remain bearish AUD/NZD and see potential long in EUR/JPY as the block order today might signal the pair is bottomed out.
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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