By Abdul H. Jaffar STATE OF THE MARKETS
Stocks sold off as retail sales disappoint. US stocks were sold off on Thursday after news of disappointing retail sales (-0.6% vs -0.3%) and contracting manufacturing index in both the Empire State (-11) and Philly Fed (-13.8). Nasdaq (-3.23%) fell the most, followed by Russell (-2.52%), S&P (-2.49%) and Dow (-2.25%) as investors flock to longer term bond’s safety. The 10Y benchmark eased lower to 3.45% while the shorter 2Y edged higher to 4.24% as the Dollar index regained the 104 handle.
In the commodity markets, crude oil eased off lower to $76.40/bl on profit taking as short term traders geared up for the weekend holiday next week. As at writing, gold remained under pressure below $1,780/oz as markets continue to weigh the higher target rates of 5.1% as opposed to 4.6% back in September. Elsewhere, iron ore jumped to $110.50/tn after reports of improving demand in India.
In the FX space, King Dollar seized the helm of demand in the short term accounts alongside Euro and Swiss, while Euro and Swiss retained the two top spots in the medium term accounts. The sell off in Aussie spread out to medium term accounts as sentiments turned bearish after the disappointing sales report. Overall sentiments flipped to bearish.
On Friday, markets may turn messier than expected as major averages broke secondary support and investors may not look forward to buying stocks ahead of the weekend. More churning is expected as investors watch the earnings from Accenture PLC (ACN), Darden Restaurants (DRI) and Winnebago Industries (WGO) as well as Markit’s PMI on a thin Friday.
G8 CURRENCIES SENTIMENTS
| ST | USD | EUR | CHF | CAD | JPY | NZD | GBP | AUD | ST |
| MT | CHF | EUR | NZD | USD | GBP | CAD | JPY | AUD | MT |
| LT | NZD | GBP | CHF | JPY | EUR | AUD | USD | CAD | 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 | 19.64 | – 9.91 | 214,019.0K | 208,213.9K |
| SQQQ | 48.78 | + 9.79 | 133,116.5K | 134,131.2K |
| TSLA | 157.67 | + 0.55 | 122,334.4K | 78,839.7K |
| SPY | 389.63 | – 2.45 | 117,724.4K | 85,419.8K |
| SOXL | 11.40 | – 12.31 | 107,246.2K | 108,708.4K |
| AAPL | 136.50 | – 4.69 | 98,931.9K | 83,738.6K |
| AMZN | 88.45 | – 3.42 | 84,802.8K | 69,140.6K |
| XLF | 33.96 | – 1.96 | 70,305.8K | 42,446.1K |
| QQQ | 276.89 | – 3.36 | 60,687.9K | 58,118.8K |
| LABU | 6.62 | – 8.69 | 58,633.3K | 55,145.6K |
** % Change here refers to price vs previous day price
WALL ST TOP FLOWS
| TICKER | LAST PRICE |
VOLUME |
% CHANGE | FUNDS FLOW $ |
| TSLA | 157.67 | 122,334.4K | + 26.65 | 19,288.5M |
| AAPL | 136.50 | 98,931.9K | + 36.69 | 13,504.2M |
| NVDA | 249.01 | 35,568.0K | + 37.63 | 8,856.8M |
| AMZN | 169.52 | 47,854.2K | + 8.35 | 8,112.2M |
| MSFT | 88.45 | 84,802.8K | + 16.68 | 7,500.8M |
| AMD | 290.41 | 17,724.5K | + 90.59 | 5,147.4M |
| META | 116.15 | 34,530.9K | + 9.89 | 4,010.8M |
| GOOGL | 66.53 | 58,557.0K | – 4.50 | 3,895.8M |
| BABA | 90.86 | 40,107.0K | + 46.53 | 3,644.1M |
| GOOG | 86.21 | 30,419.4K | + 15.61 | 2,622.5M |
** % change here refers to volume vs. 20 days average volume.
TOP 5 BLOCK ORDERS
| TICKER | PRICE | TYPE | VOL/OI | FUNDS FLOW |
| LAZR | 6.81 | stock/options | 221.75 | 44.3M |
| HD | 327.60 | stock/options | 103.11 | 1,656.9M |
| AAPL | 136.50 | stocks/options | 65.78 | 13,504.2M |
| NQ | 11,464.50 | NASDAQ futures | 16,407 | 188.2M |
| YM | 33,444.00 | DOW futures | 4,825 | 161.5M |
OUR PICK – No New Picks
No new picks going into the weekend. Major averages broke secondary support on Thursday and we see this fuel doubt into the year end aka Santa Rally in the next two weeks. S&P broke the key 3,950 and its 100 DMA and is now looking towards 50 DMA circa 3,860. Nasdaq and Russell have both broken below their 50 DMA and this would not bode well for bulls. With equities reporting -$14.4 billion outflows as of Wednesday, -$4.3 billion out of taxable bond funds and +$18.9 billion moving into short term money markets; we saw investors were running for cover and expect King Dollar to remain steady as more liquidation comes into play.
Trades updates:
Equities: Except for SQ (about fairly valued with 4.96 z-score) and VIPS (34% undervalued with 3.92 z-score) that hold steady in the stocks rout; CRON (31% undervalued with 23.21 z-score), AUY (13% undervalued, 2.22% yields), T (about fairly valued, 6.01% yields), WBA (10% undervalued, 4.86% yields) and M (42% undervalued, 2.90% yields) all pulled back deeper from their recent highs.
FX & Commodities: EUR/JPY was stopped out at breakeven, we remain bearish AUD/USD under 0.6850 and XAU/USD under $1,825.00
For more high probability picks, please use our Trading Central services. You could also join us at MFM’s TradeCopy
| HORIZON | STRATEGY | SL | TP1 | TP2 |
| Short-Term | – | – | – | – |
| Medium-Term | – | – | – | – |
| Long-Term | – | – | – | – |
Disclaimer:
This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. 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.