It was a bullish month for equities, SPX +208pts (5.4%) to 4080, the Dow +1856pts (5.7%) to 34589, with the Nasdaq comp’ +479pts (4.4%) to 11468.
WTIC cooled by -$5.98 (6.9%) to $80.55. Copper gained by +36cents (10.8%) to $3.74. The USD weakened by -552bps to DXY 105.90. The US 10yr yield cooled by -42bps to 3.68%.
SPX, monthly
Wednesday’s massive upside reversal on Powell talk, has resulted in the first monthly settlement above the 10MA (4057) since March. Any price action much above 4100 will offer a straight run to the 4300s.
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Dow, monthly
October’s bullish engulfing candle played out, with a decisive settlement above the monthly 10MA (32571).
Nasdaq comp’, monthly
Tech’ climbed for a second consecutive month, if remaining under the key 10MA. Still m/t bearish… bulls need >12k.
WTIC, monthly
The fifth monthly decline of six, the fourth consecutive monthly settlement under the 10MA, as oil is m/t bearish. November’s performance was even worse relative to the positive equity market, and the powerfully weaker dollar.
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Copper, monthly
Copper climbed into end month, the first net monthly gain since March. The November candle is distinctly spiky on the upper side from around the 10MA… as copper remains m/t bearish.
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USD, monthly
King dollar cooled for a second month, weakening by around -5.0%. I’d note the 10MA in the 104s. Any price action <100 would merit alarm bells. For now… the latter still seems very unlikely, considering ‘everything’, not least the relative weakness within Europe and the UK.
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US 10yr yield, monthly
November saw yields cool back, but the l/t bullish trend remains intact. Rate hike seven is due Dec’14th, and whilst it will likely only be 50bps, a push to psy’ 5.00% appears an eventuality, as inflation remains elevated.
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Looking ahead
Thursday will see Weekly jobs, pers’ income/outlays, PMI/ISM manu’, construction, vehicle sales
Earnings: DG, KR, BIG, TD, LE, CHPT, ULTA, MRVL, ZS, AMBA
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The pressure on the Fed
The day began with an overnight tweet from Elon, one of many who are increasingly demanding the Fed to cut rates.
Powell’s latest fedspeak nonsense greatly pleased the market. Along with some bullish chasing, some of today’s upside was due to (understandable) short covering.
Lets be clear… Powell/Fed are under pressure from some pretty powerful people. There is only so much pressure that an individual or institution can take before it buckles.
Whilst it is the case that the ultimate equity sell signal would be a rate cut… for those short this afternoon, such a notion is irrelevant.
As things are, it’d seem the Tom Lee, Cramer, et al… are more likely to be right about their end year rally, than a realistic probability of any price action <3900 in the remaining twelfth of the year.
With just 21 trading days left of 2022…
Goodnight from London