tsptalk's Market Talk

[tsptalk]

The jobs report came in light - more than 100K below estimates. The unemployment rate was 3.6% - slightly better than expected, and wages grew at 0.02%, a tick lower than expected.

The market's knee-jerk reaction in the futures at 8:30 AM ET was to rally. That's what we thought could happen because it puts pressure on the Fed to consider cutting rates sooner than later. We also said that this bad news is good news rally could be sold quickly.

Friday's commentary: https://www.tsptalk.com/mb/blogs/tsptalk/4738-relief-continues-help-mexican-tariff-talks.html

 

[tsptalk]

The AGG (F-fund) did break above that bull flag that we talked about in today's commentary. The new low in yields while stocks rally tells us this is all about the Fed potentially cutting because of weak economic data.

Just like stocks plummeting late last year when the Fed was raising rates because the economy was running hot, the market seems to be all about the Fed and not the economy.

 

[tsptalk]

This is quite the trajectory. Sustainable? :blink:

 

[userque]

This is quite the trajectory. Sustainable? :blink:

Probably not. But it could go sideways for a few days, then continue up. Or not. Oh the many choices.

 

[DreamboatAnnie]

Also seems like it has gone back to the "bad news is good" and vice versa.... Like you said, its about the Fed .......and rate hikes or cuts...:blink:

The AGG (F-fund) did break above that bull flag that we talked about in today's commentary. The new low in yields while stocks rally tells us this is all about the Fed potentially cutting because of weak economic data.

Just like stocks plummeting late last year when the Fed was raising rates because the economy was running hot, the market seems to be all about the Fed and not the economy.

 

[tsptalk]

The market seems to have already priced in 3 rate cuts in 2019, and a fourth going out 12 months. Talk about a sell the news set up.

Also seems like it has gone back to the "bad news is good" and vice versa.... Like you said, its about the Fed .......and rate hikes or cuts...:blink:

 

[quabit]

The market seems to have already priced in 3 rate cuts in 2019, and a fourth going out 12 months. Talk about a sell the news set up.

Tom has any gaps been created during this run up?

 

[tsptalk]

Not really, although a day like today does create a sort of gap between yesterday's close and today's low. But no obvious gap that we can see on the chart.

 

[tsptalk]

Not really, although a day like today does create a sort of gap between yesterday's close and today's low. But no obvious gap that we can see on the chart.

Here's an example: The red boxes are physical gaps that are obvious and traders will look for those to get filled. It could be self-fulfilling. The blue boxes are gaps between the prior close and the current low, and can be as psychological. Someone sold that prior day near the closing prices then missed the gains they could have had with the thought, "I'm going to buy it back if it comes back near that closing price where I sold."

 

[tsptalk]

Kind of a yawner day. I can't even find a chart worth posting. The yield on the 10-year dipped lower again, possibly breaking below a bear flag, but let's see how the afternoon plays out before calling it a breakdown.

 

[tsptalk]

The yield on the 10-year dipped lower again, possibly breaking below a bear flag, but let's see how the afternoon plays out before calling it a breakdown.

 

[tsptalk]

Hong Kong was trading down over 2% last night, dragging our futures down with it, but it ended up bouncing back (Heng Seng closed down just 0.15%) and our futures reversed.

Then there was attack on oil tankers in the Gulf of Oman and that sent oil prices rallying - and the market is responding positively to that as well.

https://www.cnbc.com/2019/06/13/oil...s-of-tanker-incident-in-the-gulf-of-oman.html

 

[tsptalk]

The S&P 500 futures has already created an outside day after reacting to the Hang Seng market overnight. The S&P 500 cash has not done so yet.

 

[tsptalk]

The line has been drawn for the Russell 2000. 1535+ or bust... But then the 200-day EMA comes back into play.

 

[tsptalk]

This could be a bull flag forming on the S&P 500, although its slope could be too steep and a little "peaky". That's what happened in May with a similar flag-like formation.

 

[tsptalk]

Everything seems to be up to some degree this morning, except for the Transports.

The Russell 2000 small caps ran right up to the 50-day EMA again, where it has been struggling lately. Will investors be brave enough to push this higher BEFORE the FOMC's decision on interest rates Wednesday?

 

[tsptalk]

Bull flag breakouts after Trump tweet. Also, 10-year yield broke to new lows (bottom chart) but has since reversed.

 

[tsptalk]

 

[tsptalk]

 

[tsptalk]

Oil prices jumps to highs of the day, up more than 4% after Trump says Iran made a ‘very big mistake’

https://www.cnbc.com/2019/06/20/oil-market-us-stockpiles-upcoming-opec-meeting-in-focus.html