Macro Morning

Wall Street continued the co-ordinated risk rebound overnight as the Gamestop short squeeze has now almost completely disappeared alongside an aborted attempt to do the same to silver.  The USD gained more strength against most of the majors although it had a small pullback later in the session in the wake of the EZ wide GDP print.

Bitcoin is the darling again, lifted solidly up towards the $36K level as its swing back from the $31K lows continued with the four hourly chart supportive of more upside here as momentum picks up:

Looking at share markets in Asia from yesterday’s session where the Shanghai Composite closed 0.8% higher to remain well above the 3500 point level at 3533 points, while in Hong Kong the Hang Seng Index again moved higher, this time up 1.2% to close at 29248 points. This rebound is doing a good job to stop a pullback turning into a rout with price again rebounding above former daily trailing ATR support. Price has stabilised here as it makes a new daily high above 29000 points:

Japanese markets are still rebounding with the Nikkei 225 finishing more than 1% higher at 28362 points. Daily ATR support at the 27500 point level remains unbreached with another steady session calming nerves with the potential to get back to the former highs below 29000 points rising:

The ASX200 also had another solid session, moving exactly 99 points or 1.5% higher to 6762 points helped by the expansion of RBA stimulus. SPI futures are up slightly with the daily chart still showing a lot of buying support below, with yesterday’s RBA punchbowl spilleth over and ready to engage up towards the 6800 point level:

European markets were eager from the start and all closed up significantly, the German DAX finishing 1.5% higher to 13835 points. Another market which has bounced off its own daily ATR support level and is now suggesting a return to the former highs in early January:

Wall Street again was solid across the board with the NASDAQ and S&P500 both lifting 1.5% higher to close the gap, the latter finishing at 3826 points. The four hourly chart shows an big surge that has almost taken back the bourse to the January highs with momentum getting a little ahead of itself as price stalls very slightly above the 3800 point level:

Currency markets remain in a strong USD position with Euro again dropping sharply overnight before a small reprieve this morning as it almost broke through the 1.20 handle for a new monthly low. Momentum is now officially oversold but can continue a downward trajectory, so watch for another session low below the 1.2020 level:

The USDJPY breakout continues although the rate of change is slowing with an inability to really breakthrough the 105 handle and make it stick quite telling. The four hourly chart shows momentum crossing down from high overbought levels as price remains firm around the high moving average but look for a slowdown around the low moving average in the coming sessions:

The Australian dollar went into a sharp dive following yesterday’s RBA meeting, and matched the previous December low at just below the 76 handle before rebounding very late in the session. As I said yesterday, I’m still watching the intraweek low from last week at the 76 level proper as the uncle point, so watch for another inversion today:

Oil prices are coming back and then some with a breakout finally as Brent moved 2% higher to break the $57USD per barrel level, making a new monthly high and almost back to pre-COVID level (upper horizontal black line). Low volatility always begets high volatility with this commodity – with the upside target as high as $70 at the 2019 highs:

Gold was caught up in the Reddit based short squeeze alongside silver but it was all for naught with a pullback towards the previous daily lows at the $1838USD per ounce level overnight. This brings the daily chart back to reality a little with the potential for another breakout fading:

 

Glossary of Acronyms and Technical Analysis Terms:

ATR: Average True Range – measures the degree of price volatility averaged over a time period

ATR Support/Resistance: a ratcheting mechanism that follows price below/above a trend, that if breached shows above average volatility

CCI:  Commodity Channel Index: a momentum reading that calculates current price away from the statistical mean or “typical” price to indicate overbought (far above the mean) or oversold (far below the mean)

Low/High Moving Average: rolling mean of prices in this case, the low and high for the day/hour which creates a band around the actual price movement

FOMC: Federal Open Market Committee, monthly meeting of Federal Reserve regarding monetary policy (setting interest rates)

DOE: US Department of Energy 

Uncle Point: or stop loss point, a level at which you’ve clearly been wrong on your position, so cry uncle and get out!

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