A Little Something 4 Everyone
Equities overnight were hit due to the Alphabet and Microsoft earnings as disappointment set the tone and a below consensus earnings for Alphabet, coupled with disappointing Q2 revenue outlook out of MSFT was enough to keep a negative bias especially for the tech heavy Nasdaq. What is interesting to note is that the technical chart structure is still solid and basing so we believe this move offered a little something for everyone (sellers to buy in and new longs to be set). Here is how they currently look GOOG and MSFT (marketwatch data):
We were not at all surprised to see heavy Pre NY ETF action weigh in on the Nasdaq, which it did and it managed to take out the overnight low by a few ticks, and since then has been straight up:
We believe you will see sellers at 11620 and again at 11675 initially, but you know our viewpoint, this market is basing out and we suspect the lows to be bought into by longer term types. Two way action should be the rule of the day here and it was sellers overnight, met once again with early NY fast money accounts.
With the PBOC and BOJ essentially drawing lines in the sand here currency wise, risk assets should take that cue and start tossing chips on the table. The PBOC was in there last night defending the CNY and we know the BOJ will continue this process as well. Will it all last? Selling $$s who knows, but for now those are the flows.
We also saw the new home sales number this morning showing a continued decline now down 17.6% yoy and that is no surprise right! All that stimulus now back below covid lows and below trend line growth rate over last decade:
Ok the US Bond market is up again today price was and the long end is actually leading the way! Amazing stuff, we have seen On the Run issues gaining ground the last couple days and it looks like a few accounts dipping in across the treasury board here again today. US Govt 30Y leading the way -11.1 basis points:
Ok expect back and forth here for the last few days of the month with a slight buy the risk on mentality awaiting Nov 2 FOMC…Till next time.
bonus chart for longer term outlook players, bull move is being backed by these 2 levels now. Bulls do not want to see either of these levels breached on a closing basis in the Nasdaq futures:
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