SGT Chart Book

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US Equity markets see Dow Jones trade to All-time highs (ATH)

S&P 500 Weekly Winning Streak Is Longest in 6 Years (since November 2017)

The Dow Jones Industrial Average set a record for a third straight day Friday to cap a strong week for stocks. The S&P 500 advanced for a seventh consecutive week, its longest winning streak in six years.

 

The Federal Reserve hinted Wednesday it could cut interest rates next year. Rate cuts would mark a major turning point in the Fed’s roughly two-year campaign to control inflation.

 

The Dow rose to a record 37305.16 points on Friday.

 

All 3 indices (Dow, SP500 and Nasdaq were up more than 2% for the week.

 

Traders have reset their interest-rate expectations for next year, sending the 10-year yield down over a percentage point since late October from highs above 5%. That means borrowing costs are lower and financial conditions are “easier” in Wall Street parlance, helping spark a rally in many of the riskier, rate-sensitive assets that investors had shunned over the last two years.

 

The Russell 2000 index has done someithng quite remarkable in the last 48 days, making a new 53 week high on Thursday after hitting a 52-week low 48 days ago.

 

There is now debate over whether the strong market rally in response to Wednesday’s Fed meeting complicates the central bank’s path. Traders are currently pricing in at least five rate cuts next year, more than the three the Fed has forecast. Some investors say economic growth is too strong for the Fed to cut that many times.

 

On Friday, a senior Fed official said that central-bank policy makers weren’t actively debating when to cut interest rates, an apparent effort to temper markets’ exuberant interpretation of the comments that Chair Jerome Powell made two days earlier.

 

This will be the last Chartbook of the year. We would like to wish you all a very Merry Christmas and a prosperous New year. If you have any comments regarding content for next year, please send to trading@sgt.markets, we would love to hear from you.

USA30

All-time highs

USA100

So close to ATH’s, can we trade above before end of the year.

USA500

ATH test next week?

US 10-YEAR NOTE

Quite a turnaround, after highs above 5%, while we close on Friday below 4%.

DXYUSD

Shows side ways trading for most for 2023.

EURUSD

Short term 50% retracement held, with test of previous highs.

USDJPY

Double top and break down below major up channel.

GBPUSD

Long term down trendline on weekly chart dominates, with current USD weakness will we see a test before end of the year.

USDCAD

Testing resolve of dollar bulls, trendline support just below current rates.

AUDUSD

Breach of down sloping trendline

USDMXN

Downtrend intact

XAUUSD

Gold seem to like Feds comments. Lower $, higher Gold

XAGUSD

Breach of up and downside trendlines. Bias to upside into year end.

USOIL

Support seen around the 66/68 zone. Trend line resistance way above market.

BTCUSD

Continued strength despite bearish divergences.

ETHUSD

Horizontal line needs to hold for continued strength, a break here coupled with bearish divergencies sees lower levels and our favored short term view.

VIX

Investors have also switched from fear to greed in the options market. The VIX gauge of implied volatility this week reached its lowest since before the pandemic lockdowns in 2020.

Happy holidays from SGT Trade desk.

trading@sgt.markets

Disclaimer: Trading Desk Observations are not trade recommendations. The purpose of these charts is to bring to your attention potential chart patterns you may wish to monitor.

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