Thank you for joining us for another edition of the Magnelibra Markets Podcast, I’m your host Mike Agne and today’s episode #12 is entitled “Risk Assets Open 2024 On a Sour Note!”
Ok so there is a lot we need to cover here in regards to the close out of the first week of trading for 2024. The markets had quite a day, after rejecting the initial moves in the equities and bonds to the downside, the markets rallied to then spend the rest of the day slowly creeping back lower in both segments.
If you didn’t listen to yesterday’s podcast please do, we cover the Non Farm Payroll and ISM services number and the markets reactions. As far as todays podcast we want to review from a technical standpoint some of the markets that Magnelibra covers. We will also post our usual subscriber trackers and talk a little mystery and science with the ongoing MH370 hotly contested debate on X as to the new video that surfaced, we know you will be as intrigued as we are, so let’s jump right in.
The first charts we want to look at are the equity futures, starting off with the Nasdaq futures. We pointed out yesterday the 16555 level and the importance of the weekly close above or below that level. Well it held for a bit, but closed down at the 16460.25 level. Certainly not a good close for the bulls, but we also know this first week has most likely seen many investors selling to take profits and do a little tax harvesting. The bigger picture lies within the trend channel which the Nasdaq once again finds itself back in and now the risk is for a continuation of this weeks move. We don’t have any real support in the Nasdaq till the 21p level near 15500:
As far as the SP500 futures the sellers are once again matching the setup from early 2022. Real support comes in at 4627 area some 110 ticks away. So lets see if the market can stabilize here early next week, if not downside risks are evident here:
As far as the Russell2k futures our listeners and readers have seen this chart before and we thought this could go one of two ways, we would either see a continuation move outside the basing pattern that we outlined, or the Russell would fail for the 5th time at these levels. Well barring a reversal this week, the Russell finds itself once again shackled by the basing channel parameters:
Moving overseas let’s move to the DAX where the weekly bar is a disaster and a break of the 16555 area will open up the real selling, so next week this is our level to watch and we would suspect initial buyers there:
Alright let’s move over to the bond market where the US yield curves put on a bear steepening move as the 2s were virtually unchanged with the 30s +6.2bp:
This is the 2nd steepening attempt by the bond market in this higher for longer regime, so the bond market as time moves forward will be highly dependent on the data in regards to whether the FOMC will be forced to cut or not. If the data continues to be stronger than expected, then a lot of this steepening will be reversed out and yields will move higher once again.
We can see evidence of some accounts selling the longer end here this week as the 10s/FF spread was narrower to -128bp up from -147bp:
Let’s move now to a couple of other commodity charts, starting with Crude futures where the 67.75 level has held thus far and the market is in good shape to continue the move higher. We aren’t sure of the catalyst, whether its extreme cold, global conflicts flaring up or what, but for now the pattern is bullish and we won’t change our minds unless that $67 area gives away:
When we look at Natural Gas we can clearly see that the colder European weather up north is having its effects. However we do believe this market is still being subsidized for now, so not sure how high this can actually run:
Let’s take a look at Silver futures now where the 3 year trend channel is still dictating things, we spent a few months outside it in the 2nd half of 2022 but are still within its boundaries. The breakout attempt in December has been negated now:
Ok let’s look at the overall settles and our subscriber trackers before we get to the other technical charts as the ultra-bond future was the days biggest loser and the winner was Crude Oil:
The Futures Model Tracker cut the weeks losses in half and there are no changes to the sentiment right now:
As far as the MEGA8s the group was lifted by Nvidia and Meta to salvage the day and the total market cap lost about $470Bn so far off its highs:
Nvidia is putting in a sideways to higher trend here but the steep support line comes in at about $455 so a trade back below there could signal the end of this bull move but for now, Nvidia still seems poised to retest the highs:
The same cannot be said for Apple, where the technical picture continues to sell off and it closed below our marker of death at $181.50, so either the bulls step in here early next week, or else the 50p VWMA becomes the next level of support:
Looking at the Magnelibra MEGA8s composite chart it is still above our line in the sand at 2222:
A couple of other equity charts we like to highlight are Chipotle and Lululemon, we have been shocked by their outperformance but for now there seems to be willing and able sellers stepping in here and $2175 is the level to watch for Chipotle:
When we look at Lululemon the technical picture is similar and the level we are keying is $485 we would like to see this level hold, but a weekly close below would open the door to further downside:
Ok that wraps up the technical picture and this week the important data points are the inflation reports due out on Thursday and Friday with CPI and PPI. Here is the weeks data courtesy of MarketWatch:
In conclusion we wanted to relay the ongoing saga we have been watching playout on X with Ashton Forbes and the video that he is using to reinvigorate the worlds interest in getting down to the truth of the disappearance of Malaysian Flight MH370. We wanted to share with you his recent X post and a link to the video that many have tried to debunk, but have been unable to do so. The video is fascinating and straight out of a Sci-fi movie and we encourage you to watch it if you can. The quest to uncover the truth behind this disappearance is ongoing and Ashton Forbes continues to press on and push the envelope digging further and further. We also know that its impossible for a 777 to just disappear and that somebody knows the truth, so we continue to watch these developments and maybe some of you would like to watch it as well, so here is the post and the link to the video on X:
Ashton Forbes MH370 Video Link on X
That is all we have for you today, we hope you continue to support and share our work our goals are to grow our audience so that we can educate as many people as possible as to how and why the financial markets move the way that they do. We hope the insight, the data, and above all else that the conviction that we have shows up in our work each and every day.
Thank you to our current subscribers for supporting our work and if you cannot afford to subscribe, we understand so please just leave a like or share our work with some of your colleagues. Remember 2024 is about positivity, we view our realm as a binary construct of positive and negative and that each and everyone of us plays a bigger role then we think. We have the power to choose the output and its connotation will have a negative or positive reverberation, its up to you to choose the positive outcome…Let’s always try to focus on the positive and let’s see if we can shape our reality together! Till next time…Cheers
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