Macro Market · Market Commentary · Newsletter

Daily Commentary – Brexit II

It’s official – The unthinkable happened again. In a Brexit type repeat or even more, “Markets around the world are beginning to price in a Donald Trump victory, as the U.S. stock futures plunged, with futures on the Dow Jones Industrial Average falling 792 points, or over 5.1%.”

http://www.forbes.com/sites/antoinegara/2016/11/08/global-markets-plunge-as-republican-donald-trump-gains-a-path-to-u-s-presidency/#406582c73633

It was a marathon but as of 2:40am EST, major news outlets finally declared that Trump’s victory is in the books.

http://www.telegraph.co.uk/news/0/donald-trump-set-for-us-election-victory-in-americas-brexit/

With Trump Gapdown now assured, this edition will be a pack of LT charts to assess where the falling knifes could potentially land. Starting with the Dow, given futures remain down 700pts, the implied open tomorrow will be around the 50WMA at 17659. Should that break, the combination of downtrend breakout and 200WMA will be next down target around 16771 area.

20161109-INDU.png

The SPX looks headed to bottom of Brexit down candle and LT uptrend just under 2000:

20161109-SPX.png

But once again, being the leading indicator to the downside, we ought to pay attention to the Russell 2000 (IWM). A repost of yesterday’s chart, a lower low with positive technical divergence would likely be formed near the 200DMA area.

20161109-IWM.png

Gold is the biggest winner, as it seemingly nullifed the bearish H&S pattern by decisively punching through 1300, and spiked right up to the LT descending trendline resistance in the weekly chart at 1340. A confirmed close above points to 1400, but jury is still out.

20161109-GOLD.png

Mixed bag in the US Dollar, as the DXY plunged right to bottom of ST downtrend breakout but bounced right back up. More support looms at 200MA and ST uptrend just under 96 in the 4-hour chart. A break below points to bottom of horizontal trading range at 92.5.

20161109-dxy

What is eye-popping is the 30y Treasury Bond’s rollercoaster ride, as the 30Y yield was down as much as 10bps on risk aversion but now spiking up 5bps above a ST up channel.

20161109-TYX.png

In the long-term picture, still need to wait until Friday’s close, but a confirmed break above LT downtrend would point to 200WMA as next upside target similar to in 2015 which is about 40bps away

20161109-TYXWEekly.png

As of 3:00am EST, futures are storming right back after Trump’s victory speech during which he sounded rather presidential, as “Mr Trump pledged that he would be “president for all Americans”. he said he was “reaching out” to the people who had not supported him to “unify the country”.”

http://www.telegraph.co.uk/news/0/donald-trump-set-for-us-election-victory-in-americas-brexit/

Things will get wild and jittery for days to come, as experienced in the Brexit debacle. Per ZeroHedge, current price action in S&P futures mirrors closely the move into and out of Brexit. Furthermore, after the initial plunge post Brexit, S&P futures proceeded to retrace 50% of losses before the next leg to lower lows. Our view is there will be shortable spikes on retracements as well as a buyable bottom, but we will let the dust settle before jumping into conclusions.

20161109-ZH-BrexitTrump.jpg

http://www.zerohedge.com/news/2016-11-09/brexit-vs-us-election-deja-vu-all-over-again

 

Daily Market Snapshot

Sector ETFs by Daily Return %

SYMBOL NAME CLOSE DAILY (%) WTD % MTD %
XLU SPDR Select Sector Fund – Utilities 49.17  

0.38

0.78%

2.54% -0.53%
QQQ PowerShares QQQ Trust 117.11  

0.76

0.65%

3.04% 0.10%
IYR iShares Dow Jones U.S. Real Estate Index Fund 75.62  

0.46

0.61%

2.26% -1.33%
XLI SPDR Select Sector Fund – Industrial 58.21  

0.35

0.60%

3.08% 1.75%
DIA Dow Jones Industrial Average ETF 183.38  

1.02

0.56%

2.61% 1.22%
XLK SPDR Select Sector Fund – Technology 47.41  

0.23

0.49%

2.66% -0.02%
SPY SPDR S&P 500 214.11  

0.96

0.45%

2.67% 0.73%
XLP SPDR Select Sector Fund – Consumer Staples 52.7  

0.22

0.42%

2.11% -0.19%
XLY SPDR Select Sector Fund – Consumer Discretionary 78.82  

0.32

0.41%

2.72% 0.92%
XLG Rydex Russell Top 50 ETF 150.8  

0.53

0.36%

2.56% 0.51%
XLB Materials Select Sector SPDR 47.26  

0.15

0.32%

1.85% 1.09%
XLV SPDR Select Sector Fund – Health Care 68.37  

0.19

0.28%

2.84% 1.50%
IWM iShares Russell 2000 118.88  

0.31

0.26%

2.71% 0.32%
XLFS S&P SmallCap Financials Portfolio 31.55  

0.08

0.25%

2.60% 1.32%
SMH HOLDRS Merrill Lynch Semiconductor 68.71  

0.12

0.17%

3.18% 0.64%
IBB iShares Nasdaq Biotechnology 261.62  

0.45

0.17%

3.94% 1.92%
XLE SPDR Select Sector Fund – Energy Select Sector 69.32  

0.09

0.13%

2.29% 1.02%
XLF SPDR Select Sector Fund – Financial 19.99  

0.01

0.05%

2.57% 1.27%
PFF iShares S&P US Preferred Stock Fund 38.14  

-0.1

-0.26%

0% -2.08%
XRT SPDR S&P Retail ETF 41.71  

-0.12

-0.29%

1.56% -1.23%
KRE SPDR KBW Regional Banking ETF 43.97  

-0.25

-0.57%

2.28% 0.41%

 

Commodity & Bond ETFs

SYMBOL NAME CLOSE DAILY  (%) WTD % MTD %
SLV iShares Silver Trust 17.4  

0.11

0.63%

-0.34% 2.53%
DBA PowerShares DB Agriculture Fund 20.43  

0.04

0.20%

0.05% -0.44%
AGG iShares Barclays Aggregate Bond Fund 110.93  

-0.18

-0.16%

-0.28% -0.33%
HYG iShares iBoxx $ HY Corp Bond Fund 85.98  

-0.19

-0.22%

1.18% -0.05%
LQD iBoxx $ Investment Grade Corporate Bond Fund 120.46  

-0.27

-0.22%

-0.29% -0.43%
TLT iShares Barclays 20 Year Treasury Bond Fund 130.09  

-0.53

-0.41%

-1.25% -0.88%
GLD SPDR Gold Trust 121.64  

-0.51

-0.42%

-2.21% -0.25%
GDX Market Vectors TR Gold Miners 23.96  

-0.12

-0.50%

-4.43% -2.28%
USO United States Oil Fund 10.1  

-0.06

-0.59%

1.20% -4.08%

Country ETFs

SYMBOL NAME CLOSE DAILY (%) WTD % MTD %
EWW iShares MSCI Mexico Index Fund 52.79  

0.91

1.74%

6.97% 3.86%
EWO iShares MSCI Austria Index Fund 16.44  

0.18

1.10%

1.67% 0%
EWY iShares MSCI South Korea Index Fund 56.37  

0.61

1.09%

3.66% 1.84%
EWA iShares MSCI Australia Index Fund 20.68  

0.2

0.97%

3.92% 1.97%
EWM iShares MSCI Malaysia Index Fund 32.16  

0.3

0.94%

2.68% 303.01%
EWS iShares MSCI Singapore Index Fund 21.06  

0.16

0.76%

2.53% 103.48%
EWZ iShares MSCI Brazil Index Fund 37.54  

0.27

0.72%

6.17% -0.58%
FXI iShares FTSE/Xinhua China 25 Index Fund 37.63  

0.27

0.72%

3.84% 2.09%
EWH iShares MSCI Hong Kong Index Fund 21.32  

0.14

0.66%

0.90% -1.16%
EEM iShares MSCI Emerging Index Fund 37.47  

0.24

0.64%

4.29% 0.89%
EWC iShares MSCI Canada Index Fund 25.41  

0.16

0.63%

1.93% 0.24%
EWD iShares MSCI Sweden Index Fund 27.46  

0.17

0.62%

2.08% -0.29%
EWK iShares MSCI Belgium Index Fund 17.74  

0.1

0.57%

1.31% -0.89%
EWN iShares MSCI Netherlands Index Fund 24.41  

0.13

0.53%

1.96% -0.29%
DXJ WisdomTree Japan Total Dividend Fund 44.73  

0.22

0.49%

3.11% -0.93%
EWQ iShares MSCI France Index Fund 23.99  

0.1

0.42%

1.95% -0.25%
EWU iShares MSCI United Kingdom Index Fund 30.01  

0.11

0.37%

1.87% 100.07%
EWI iShares MSCI Italy Index Fund 22.32  

0.07

0.31%

3.14% 97.87%
EWG iShares MSCI Germany Index Fund 25.64  

0.08

0.31%

1.79% -1.04%
EWT iShares MSCI Taiwan Index Fund 31.74  

0.09

0.28%

3.66% 101.40%
EWP iShares MSCI Spain Index Fund 27.14  

0.06

0.22%

1.69% -1.13%
EWX SPDR S&P Emerging Markets Small Cap ETF 42.84  

0.09

0.21%

3.08% -0.37%
EWL iShares MSCI Switzerland Index Fund 29.15  

0.04

0.14%

1.82% 0.48%
EWJ iShares MSCI Japan Index Fund 49.81  

-0.06

-0.12%

0.59% 294.38%

 

 

 

Week Ahead – Events and Economic Data

11/9 Wednesday

Time Event / Data
10:30am Crude Oil Inventories

 

11/10 Thursday

Time Event / Data
8:30am Initial Jobless Claims

 

 

11/11 Friday

Time Event / Data
10:00 Michigan Consumer Confidence

 

 

 

 

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