Macro Market · Market Commentary

Daily Commentary – Happy Columbus Day

US equity markets celebrated Columbus Day with a gap up and green close on low volume, and in the process the Dow Industrial Average closed finally above the triangle wedge, though conviction is still lacking as indicated by the doji candle. Meanwhile, SPX remains bounded inside the wedge and also closed with a weak doji candle. The ball is on bulls’ court to follow up tomorrow to the upside or risk ending up with a bearish doji reversal on both flagship indices.

20161011-DIA.png

Today’s headline is oil, which was “ripping higher after Putin says ‘Russia is ready’ to cap its production”:

http://www.businessinsider.com/crude-oil-prices-october-10-2016-2016-10

To wit, “”Russia is ready to join the joint measures to cap production and is calling for other oil exporters to join,” Putin said, according to Reuters. Similar talks ended without a deal in April after Russia refused to play ball without the involvement of Iran, its geopolitical rival and OPEC’s second-largest producer.”

Technically, the the crude oil chart’s bullish picture is very telling. It on the verge of breaking above a large inverse H&S pattern, hich on confirmation by this Friday’s close would point to 60 as next target, the swing high from 2015. In the short-term, dips can be bought towards 50 to position for the next major leg up.

20161011-CL.png

XLE (Energy) was expectedly the top performer after oil’s upthrust, as it charged right at the top of the bullish channel once again. As it has failed each of the last 4 times, bulls are recommended to wait for a confirmed break instead of chasing.

20161011-XLE.png

Meanwhile, another big mover is the Mexican stock market, which surged 3.5% after seemingly more certainty of a Clinton victory in November. While the opinion is mixed on the winner of the 2nd Presidential Debate held on Sunday, the chance of a Trump victory as perceived by the market has dimmed since the release of the recording of his lewd conversations about women

https://www.washingtonpost.com/politics/trump-recorded-having-extremely-lewd-conversation-about-women-in-2005/2016/10/07/3b9ce776-8cb4-11e6-bf8a-3d26847eeed4_story.html

Without a doubt, there will continue be plenty of soap opera in the next 4 weeks, and the Mexican markets will continue to be directly impacted. Looking at the Mexico ETF (EWW), it has been chopping sideways in a large consolidation between 47 and 54 since last year. There is also a bullish inverse H&S pattern which requires a close above 53.5 on weekly basis on confirmation of a bullish breakout. Perhaps a Clinton’s victory would be the catalyst to get EWW over the hump for more upside potential.

20161011-EWW.png

 

 

 

Daily Market Snapshot

Sector ETFs by Weekly Return %

SYMBOL NAME CLOSE DAILY (%) MTD % YTD %
XLE SPDR Select Sector Fund – Energy Select Sector 71.72 1.11

1.56%

1.57% 18.90%
IBB iShares Nasdaq Biotechnology 288.07  

3.97

1.39%

-0.48% -14.86%
IWM iShares Russell 2000 124.3  

1.47

1.19%

0.07% 10.37%
XLU SPDR Select Sector Fund – Utilities 47.51  

0.39

0.82%

-3.02% 9.77%
XLK SPDR Select Sector Fund – Technology 47.95  

0.33

0.69%

0.36% 11.95%
QQQ PowerShares QQQ Trust 119.22  

0.75

0.63%

0.42% 6.58%
XLB Materials Select Sector SPDR 47.14  

0.28

0.60%

-1.28% 8.57%
IYR iShares Dow Jones U.S. Real Estate Index Fund 77  

0.45

0.59%

-4.51% 2.56%
KRE SPDR KBW Regional Banking ETF 43.47  

0.23

0.53%

2.84% 3.70%
SPY SPDR S&P 500 216.16  

1.12

0.52%

-0.06% 6.03%
XLFS S&P SmallCap Financials Portfolio 31.11  

0.16

0.52%

2.17% 0.74%
XLF SPDR Select Sector Fund – Financial 19.72  

0.1

0.51%

2.18% 3.47%
DIA Dow Jones Industrial Average ETF 183.12  

0.9

0.49%

0.19% 5.30%
XLG Rydex Russell Top 50 ETF 153.2  

0.72

0.47%

0.28% 5.96%
XLV SPDR Select Sector Fund – Health Care 72.2  

0.33

0.46%

0.12% 0.24%
XRT SPDR S&P Retail ETF 44.02  

0.17

0.39%

1.08% 1.80%
XLY SPDR Select Sector Fund – Consumer Discretionary 79.87  

0.13

0.16%

-0.21% 2.19%
PFF iShares S&P US Preferred Stock Fund 39.23  

0.06

0.15%

-0.68% 0.98%
XLI SPDR Select Sector Fund – Industrial 57.62  

0.06

0.10%

-1.30% 8.70%
XLP SPDR Select Sector Fund – Consumer Staples 52.33  

0

0%

-1.65% 3.64%
SMH HOLDRS Merrill Lynch Semiconductor 69.4  

-0.22

-0.32%

-0.10% 30.26%

 

Commodity & Bond ETFs

SYMBOL NAME CLOSE DAILY  (%) MTD % YTD %
USO United States Oil Fund 11.67  0.34

Bitmap 2.96%
6.77% 6.09%
SLV iShares Silver Trust 16.73  

0.13

0.78%

-8.08% 26.84%
GDX Market Vectors TR Gold Miners 23.16  

0.16

0.69%

-12.37% 68.80%
GLD SPDR Gold Trust 120.16  

0.42

0.35%

-4.36% 18.43%
HYG iShares iBoxx $ HY Corp Bond Fund 87.4  

0.25

0.29%

0.16% 8.46%
LQD iBoxx $ Investment Grade Corporate Bond Fund 122.11  

0

0%

-0.87% 7.10%
AGG iShares Barclays Aggregate Bond Fund 111.53  

-0.05

-0.04%

-0.79% 3.26%
DBA PowerShares DB Agriculture Fund 20  

-0.05

-0.25%

0.10% -2.96%
TLT iShares Barclays 20 Year Treasury Bond Fund 133.13  

-0.79

-0.59%

-3.01% 10.41%

Country ETFs

SYMBOL NAME CLOSE DAILY (%) MTD % YTD %
EWW iShares MSCI Mexico Index Fund 50.92  

1.73

3.46%

5.03% 2.19%
FXI iShares FTSE/Xinhua China 25 Index Fund 39.04  

0.55

1.42%

2.71% 10.63%
DXJ WisdomTree Japan Total Dividend Fund 44.19  

0.51

1.16%

2.98% -11.76%
EWZ iShares MSCI Brazil Index Fund 35.87  

0.41

1.15%

6.34% 73.45%
EEM iShares MSCI Emerging Index Fund 38.1  

0.41

1.08%

1.74% 18.36%
EWC iShares MSCI Canada Index Fund 25.41  

0.27

1.07%

-1.09% 18.19%
EWY iShares MSCI South Korea Index Fund 58.2  

0.59

1.02%

0.12% 17.17%
EWT iShares MSCI Taiwan Index Fund 15.89  

0.14

0.88%

1.21% 24.43%
EWM iShares MSCI Malaysia Index Fund 8.14  

0.07

0.86%

0.37% 5.17%
EWA iShares MSCI Australia Index Fund 20.99  

0.16

0.77%

0.43% 10.71%
EWI iShares MSCI Italy Index Fund 11.07  

0.08

0.73%

0.45% -19.43%
EWH iShares MSCI Hong Kong Index Fund 22.25  

0.15

0.68%

1.09% 12.26%
EWG iShares MSCI Germany Index Fund 26.25  

0.17

0.65%

-0.08% 0.23%
EWD iShares MSCI Sweden Index Fund 29.3  

0.15

0.51%

0.79% 0.41%
EWQ iShares MSCI France Index Fund 24.14  

0.12

0.50%

-0.08% -0.29%
EWX SPDR S&P Emerging Markets Small Cap ETF 43.77  

0.18

0.41%

1.41% 16.07%
EWJ iShares MSCI Japan Index Fund 12.49  

0.04

0.32%

-0.40% 3.05%
EWP iShares MSCI Spain Index Fund 26.41  

0.03

0.11%

-1.53% -6.58%
EWN iShares MSCI Netherlands Index Fund 24.9  

0.02

0.08%

-0.64% 4.45%
EWL iShares MSCI Switzerland Index Fund 30.18  

0.02

0.07%

-1.21% -2.77%
EWK iShares MSCI Belgium Index Fund 18.65  

0.01

0.05%

-1.11% 3.27%
EWS iShares MSCI Singapore Index Fund 10.72  

0

0%

-1.29% 4.28%
EWO iShares MSCI Austria Index Fund 16.24  

0

0%

-0.49% 3.77%
EWU iShares MSCI United Kingdom Index Fund 15.53  

-0.02

-0.13%

-1.96% -3.78%

 

 

 

 

 

Week Ahead – Events and Economic Data

10/12 Wednesday

Time Event / Data
8:00am FOMC Member Dudley Speaks
9:40am FOMC Member George Speaks
10:00am JOLTs Job Openings
2:00pm FOMC Meeting Minutes

 

10/13 Thursday

Time Event / Data
8:30am Initial Jobless Claims
12:15pm FOMC Member Harker Speaks

 

10/14 Friday

Time Event / Data
8:30am PPI, Retail Sales
10:00am Michigan Consumer Expectation
1:30pm Fed Chair Yellen Speaks

 

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