Friday Paper Charts
November 10, 2023
I am travelling today. I will be on holiday for most of November and back into full action upon my return. Fear not, as I will still be publishing and opining on markets as usual. I have also queued up some great articles for you all to enjoy. I like planning ahead. Also, please check out this week’s free education post on Cross Currency Basis Swaps if you haven’t already.
The refunding announcement has cooled supply risks and take a bite out of the recent run-up in the term premium. Fed was dovish in downplaying the September "dots" (which implied another hike) while ISM softened and unit labour costs fell for the first time since late 2022. Yields falling and rates vol under pressure means that US financial conditions are easing from this year’s tightest reading. Unsurprisingly, the 60/40 portfolio had one of the best weeks last week.
There are some pretty decent bond moves in Europe and the UK compared to other markets.
S&P 500 saw the largest 1-day rally in 6 months. Seasonals are strong (and everyone knows it), and recent selling pressure fueled by CTA selling and risk-control deleveraging is now gone and about to turn into support.
CTA’s are already maximum short and will start to reduce on a break above 4,342, suggesting around USD 17bn of buying according to bank desk estimates, while risk-control exposure is already at the lowest since July, leaving plenty of room to add when VIX drops and cross-asset vols compress.
After posting the best week since May, the seven mega-caps are up well over 50% YTD. The other 493 stocks have risen by single figures this year.
Let’s now dive straight into the charts and see what set-ups are opening up for us this time around. I counted a new record of 106 charts that I have on offer here for you. There are plenty of signals firing, so I wanted you all to have a full picture. Please note the prices are from Thursday.
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