SGT Chart Book 22.04.24

sgt_chartbook

Geopolitical concerns, Israel/Iran and inflation, future rate cuts in US dominate the week's narrative.

 

Nasdaq: Worst week since 2022, racking up a 5.5% weekly decline. The S&P 500 dropped 3.1%, and the Dow Jones Industrial Average was up 0.2%.

 

Nasdaq and S&P 500 have both sold off in each of the past three weeks as a stronger-than-expected U.S. economy has changed forecasts for interest-rate cuts by the Fed. Those changing expectations are hitting the artificial-intelligence-oriented tech stocks that sent the market soaring in recent months.

 

After Israel targeted an area not far from an Iranian air base and nuclear facilities Thursday night, Brent crude oil prices quickly jumped from less than $87 a barrel to nearly $91 a barrel. Oil traders retreated almost as quickly when reports suggesting that the Israeli strikes appeared to be narrow in scope. Brent crude closed Friday with a 0.2% gain, to $87.29 a barrel.

 

Chicago Fed President Austan Goolsbee said at a conference that “progress on inflation has stalled.” A run-up in yields in recent weeks has turned tech stocks, the big winners in previous months, into major losers. The so-called Magnificent 7 stocks lost a collective $950 billion in market capitalization this past week.

USA30

YTD +0.8%. Back to the previous Jan 2022 highs, just around 37k.

USA500

YTD +4.1%. Worst one-week decline since March 2023, and the 6th consecutive down day which is the longest losing streak since October 2022.

USA100

YTD 1.85%. MAG7 basket: Lost over $1trillion in market cap from its highs.

NVDIA

This year’s poster child for things AI/Tech, was off 10% on Friday. The breach of the 50-day moving average may have spooked some of the momentum traders, or will we see the “If you like it at $950 per share, you have got to love it at $750?". Time will tell. Definitely one to watch.

APPLE

Lowest close of year, while losing “phone “market share to Samsung.

VIX

Six month highs, with gains this month of 60%.

US10-YEAR RATES

Yield back up after US data. Retail sales help push rates back to November 2023 highs. We see some level of chart resistance at these levels, but traders need to pay attention to the current fundamentals and how markets price in the news.  YTD yields are up close to 1%.

US2-YEAR RATES

Flirting with the key 5% level.

DXY

200/50 day positive cross. The blue horizontal line provide perspective, showing the highs and lows since Jan 2023. News is that hedge funds got the USD bet wrong with expectation of lower rates US rates this year. 107.35 area should provide some level of resistance.

GBPUSD

After reporting the significance of the weekly down trendline on the weekly close chart, we have seen GBP weakness, not only against the dollar but against other currencies, see next chart EURGBP.

EURGBP

Break of long-term trendline resistance.

EURUSD

Longer term charts show more sideways action.

USDJPY

After the break above the Yen 152 Level, we have traded close to 155. Is the BOJ watching?

USDJPY Long Term

Shows significance of USD strength, since 2011.

XAUUSD

All-time closing high for the week.

XAGUSD

Highest close since 2021, up 3% on the week. Gold/silver cross implies still cheap relative to gold. Maybe its silver's turn to shine?

USOIL

Pulled about geo-political concerns, all eyes on the current conflicts and significance to oil supplies. From a technical perspective, 50/200 day moving average positive cross and pullback to trendline support.

BTCUSD

Bitcoin halving was on Friday. How will this affect the miners and ultimately BTC prices? $60k seems to be giving some level of support after last 2 sell offs.

Join us next week, for more market insights.

 

Happy trading,
SGT Trading 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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