Macro Market · Market Commentary · Newsletter

Daily Commentary – Playing Catch-up

Yet another good day for US markets, though it was the Nasdaq and S&P500 leading the way for a change. The SPX advanced 16pts but remains in catch-up mode to the Dow, as it has yet to close above the broken up trend and make new ATHs. Meanwhile, the Dow is up 7 days in a row and continues to hug the top of LT ascending wedge.

20161116-spx20161116-indu

The story of the day is Crude Oil’s resurgence as it rallied 6% to 45.81, the most in two months, on speculation that “OPEC will agree later this month to cut production to reduce a supply glut” and was able to shrug off a large inventory build per the API.

http://www.cnbc.com/2016/11/14/oil-prices-rise-on-falling-shale-output-renewed-hopes-of-opec-cut.html

The gains could prove short-lived if the OPEC deal once again fails to materialize and inventory build continues to surprise to the upside. Nonetheless, the boost helped lift the energy sector (XLE) to close right at the Oct swing high. Nearing the top of a 6-month ascending channel, the upside in XLE looks limited until it can break above the channel with conviction.

20161116-XLE.png

The more important chart to focus on is the QQQ, which had been lagging significantly during the Trump Trade and teetering on the edge at the critical neckline support. However, thanks to the turnaround in technology sector led by GOOGL, the QQQ finally was able to muster a strong bounce of 1.4%.

http://www.nasdaq.com/article/technology-sector-update-for-11152016-googgooglxgtiglob-cm709695

That being said, it is not out of the woods yet until it can close back above 118 shoulder line to negate the bearish H&S pattern,

20161116-QQQ.png

Another sector off the lows was the Gold Miners (GDX) which jumped 4% after plunging through the neckline of large H&S to deeply oversold conditions. Technically, there are two dynamics in play for the GDX 1) we are clearly in a confirmed MT bearish H&S correction 2) but was able to bounce off ST descending channel with positive technical divergence. All in all, the bounce will find stiff resistance at the broken neckline near 22.8 area and with a looming 50-200DMA death cross at 24.5 area, in the MT lower lows mostly would ensue. On the other hand, quick tactical long opportunities arise on retest of descending channel line now just above 20.

20161116-GDX.png

Today more economic data on deck starting with PPI to give us an initial gauge of inflation before the important CPI release tomorrow. We will also have more Fed speeches ahead of tomorrow’s Yellen’s testimony which will be certainly the most watched out of the 20 Fed speeches this week – there are simply too many to keep track of and most are simply noises, but the full list can be found at http://247wallst.com/economy/2016/11/15/are-20-fed-speeches-this-week-even-with-janet-yellen-too-much/.

It will be interesting to see whether the US Dollar and Treasury yields can maintain their relentless upward momentum or finally take a pause. Not to mention, the Japanese Yen, which has moved synchronously with Treasury yields and DXY on the downside. Indeed, ever since the broken LT uptrend that we highlighted last month, aside from the occasional noise it has been firmly in downtrend mode. Looking at the Yen ETF (FXY), we have retraced roughly 50% of up move YTD, and is currently trading under 50WMA, another pivotal support. A confirmed weekly close would point to further downside towards the bottom of mega descending channel at 85 area.

20161116-FXY.png

 

 

 

 

 

 

Daily Market Snapshot

Sector ETFs by Daily Return %

SYMBOL NAME CLOSE DAILY (%) WTD % MTD %
XLE SPDR Select Sector Fund – Energy Select Sector 71.82  

1.97

2.78%

3.40% 4.66%
PFF iShares S&P US Preferred Stock Fund 37.46  

0.68

1.83%

0.32% -3.83%
SMH HOLDRS Merrill Lynch Semiconductor 68.95  

1.13

1.65%

0.57% 1%
XLU SPDR Select Sector Fund – Utilities 46.74  

0.74

1.60%

1.54% -5.44%
QQQ PowerShares QQQ Trust 116.22  

1.63

1.41%

0.36% -0.66%
XLK SPDR Select Sector Fund – Technology 46.67  

0.65

1.40%

-0.13% -1.58%
XLG Rydex Russell Top 50 ETF 152.67  

1.21

0.80%

0.33% 1.75%
SPY SPDR S&P 500 218.28  

1.69

0.78%

0.86% 2.70%
KRE SPDR KBW Regional Banking ETF 51.16  

0.33

0.65%

3.37% 16.83%
XLP SPDR Select Sector Fund – Consumer Staples 50.76  

0.31

0.61%

0.44% -3.86%
XLB Materials Select Sector SPDR 48.46  

0.2

0.41%

0.64% 3.66%
XLY SPDR Select Sector Fund – Consumer Discretionary 80.04  

0.31

0.39%

0.40% 2.48%
XLI SPDR Select Sector Fund – Industrial 61.54  

0.23

0.37%

0.80% 7.57%
IWM iShares Russell 2000 129.55  

0.4

0.31%

1.72% 9.32%
DIA Dow Jones Industrial Average ETF 189.34  

0.57

0.30%

0.46% 4.51%
XLV SPDR Select Sector Fund – Health Care 70.47  

0.2

0.28%

-0.03% 4.62%
XLF SPDR Select Sector Fund – Financial 22.18  

-0.02

-0.09%

2.35% 12.36%
IYR iShares Dow Jones U.S. Real Estate Index Fund 74.23  

-0.27

-0.36%

1.32% -3.14%
XRT SPDR S&P Retail ETF 45.06  

-0.2

-0.44%

1.46% 6.70%
IBB iShares Nasdaq Biotechnology 291.33  

-1.76

-0.60%

1.16% 13.50%
           

Commodity & Bond ETFs

SYMBOL NAME CLOSE DAILY  (%) WTD % MTD %
USO United States Oil Fund 10.34  

0.47

4.65%

5.83% -1.80%
GDX Market Vectors TR Gold Miners 22.02  

0.9

4.17%

5.26% -10.20%
HYG iShares iBoxx $ HY Corp Bond Fund 85.2  

1.11

1.31%

2.07% -0.95%
SLV iShares Silver Trust 16.19  

0.19

1.18%

-1.70% -4.60%
GLD SPDR Gold Trust 117.12  

1.01

0.87%

0.02% -3.95%
TLT iShares Barclays 20 Year Treasury Bond Fund 121.91  

0.6

0.49%

-0.11% -7.12%
LQD iBoxx $ Investment Grade Corporate Bond Fund 117.83  

0.36

0.31%

-0.21% -2.60%
AGG iShares Barclays Aggregate Bond Fund 108.89  

0.08

0.07%

-0.33% -2.17%
DBA PowerShares DB Agriculture Fund 20.05  

-0.01

-0.05%

-0.64% -2.29%

Country ETFs

SYMBOL NAME CLOSE DAILY (%) WTD % MTD %
EWZ iShares MSCI Brazil Index Fund 33.47  

1.09

3.31%

2.98% -11.36%
EWM iShares MSCI Malaysia Index Fund 30.35  

0.67

2.23%

6.23% 280.33%
EWT iShares MSCI Taiwan Index Fund 30.06  

0.6

2.02%

1.04% 90.74%
EWX SPDR S&P Emerging Markets Small Cap ETF 40.85  

0.81

2%

1.59% -5%
EEM iShares MSCI Emerging Index Fund 34.99  

0.69

1.99%

1.27% -5.79%
EWC iShares MSCI Canada Index Fund 25.37  

0.48

1.91%

2.09% 0.08%
EWD iShares MSCI Sweden Index Fund 27.44  

0.41

1.51%

-0.25% -0.36%
EWW iShares MSCI Mexico Index Fund 44.74  

0.62

1.40%

3.23% -11.98%
FXI iShares FTSE/Xinhua China 25 Index Fund 36.26  

0.5

1.39%

0.78% -1.63%
EWS iShares MSCI Singapore Index Fund 20.46  

0.25

1.23%

0.49% 97.68%
EWY iShares MSCI South Korea Index Fund 52.91  

0.58

1.10%

0.11% -4.41%
EWO iShares MSCI Austria Index Fund 16.37  

0.17

1.04%

0.24% -0.43%
EWP iShares MSCI Spain Index Fund 25.75  

0.25

0.98%

-0.39% -6.19%
EWH iShares MSCI Hong Kong Index Fund 20.78  

0.19

0.92%

-0.14% -3.66%
DXJ WisdomTree Japan Total Dividend Fund 46.95  

0.41

0.88%

3.12% 3.99%
EWN iShares MSCI Netherlands Index Fund 23.82  

0.2

0.84%

0.17% -2.70%
EWQ iShares MSCI France Index Fund 23.62  

0.15

0.64%

0% -1.79%
EWU iShares MSCI United Kingdom Index Fund 30.12  

0.16

0.53%

0.07% 100.80%
EWK iShares MSCI Belgium Index Fund 17.19  

0.09

0.52%

-1.09% -3.97%
EWG iShares MSCI Germany Index Fund 25.36  

0.12

0.47%

-0.51% -2.12%
EWL iShares MSCI Switzerland Index Fund 29.01  

0.12

0.41%

-0.58% 0%
EWA iShares MSCI Australia Index Fund 20.56  

0.08

0.39%

0.64% 1.38%
EWI iShares MSCI Italy Index Fund 21.76  

0.07

0.32%

-1.49% 92.91%
EWJ iShares MSCI Japan Index Fund 49.64  

-0.4

-1.83%

0.28% 293.03%

Week Ahead – Events and Economic Data

11/16 Wednesday

Time Event / Data
08:30 PPI
09:15 Industrial Production
10:30 Crude Oil Inventories

 

11/17 Thursday

Time Event / Data
08:30 Initial Claims, CPI
10:00 Fed Chair Yellen Testifies
12:30 FOMC Member Brainard Speaks

 

11/18 Friday

Time Event / Data
03:00 ECB President Draghi Speaks
09:30 FOMC Member George Speaks
13:00 FOMC Member Kaplan Speaks

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