Quick Market Views
Stocks: As mentioned yesterday, I believed there would be a pullback when using the 60-minute tactical charts. I took gains with a few long ideas, including SPY, QQQ, and IWM, and will be looking for new entry spots. I want to be patient because there are a lot of unknowns and potentially negative catalysts in the next few days. Earnings warnings still loom tomorrow’s jobs data should spark a move either up or down. If the NFP is under consensus at 268k then the market could rally. I am concerned that the number could be inline or higher based on the recent strong claims numbers. A lot of risk remains around Elon Musk and Tesla. See below.
Bonds: Rates are higher today with the majority of the strength with the 10 year up 13bps.
Commodities: Energy remains bid with the OPEC 2 million barrel cut and a large draw reported with inventories. I had some levels on WTI crude posted on First Call to watch on the upside.
Currencies: The US dollar is up again thanks to the risk off overall market sentiment. Crypto is under pressure with Bitcoin in a tight range.
Desk comments: GS Desk Activity:
A little over 1hr into the trading sessions and we are seeing LOs and HFs skewed better for sale 1.06x & 1.03x respectively. On the pad we are seeing elevated short activity from HFs with short sales making up roughly 55% of their sell activity.
Yesterday’s biggest winners are today’s biggest losers with our most short basket (GSCBMSAL) down 512bps & non profitable tech down down 467 bps. ETF % of tape = 38% of tape (vs 33% YTD avg).
In terms of factors we are seeing sellers of growth & buyers of value while momentum remains flat. Across the board we are most active across TMT & Consumer names skewed better for sale , volumes down 18% vs yday
Trade Ideas Sheet: I am going to take off C (Citi) long +0.2%. I didn’t like a comment from a sell-side report today and can revisit it. I am going to add JWN Nordstrom back as a long idea with a 2% long position. I will post the chart later.
US Market Indexes and Sentiment
Here is a primer on how we use Daily Sentiment Index charts. Lower on this note is bond, currency, and commodity sentiment.
S&P bullish sentiment and Nasdaq bullish sentiment bounced significantly yesterday and is over the 20-day moving average of bullish sentiment. Expect a pullback today with today’s weakness but watch the 15 level as support
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/Screen-Shot-2022-10-05-at-12.37.35-AM-1-1024x350.png)
S&P bullish sentiment with a decent move off the 5% recent low. This 5% low was the lowest level since March 2020
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/sp-index-2-1-1024x878.png)
Here is a primer on the DeMark Setup and Sequential indicators.
S&P futures 60-minute time frame backed off with the Sequential and Combo sell Countdown 13’s yesterday. Now with a new buy Setup 9. It’s going to need to hold here
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/ESZ2-Index-SP500-EMINI-FUT-De-2022-10-05-10-47-52-1024x552.png)
S&P 500 Index daily is backing off after the last two big up days. Stalling at the 20 day.
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/SPX-Index-SP-500-INDEX-Hedge-2022-10-05-10-09-58-1024x723.png)
Nasdaq 100 futures 60-minute time frame backed off with the Sequential and Combo sell Countdown 13’s yesterday. Now with buy Setup 9. It’s going to need to hold here
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/NQZ2-Index-NASDAQ-100-E-MINI-De-2022-10-05-10-48-18-1024x552.png)
Nasdaq 100 Index daily backing off the strong two-day gain. RSI stalled again at 50. A rise above 50 would add to my conviction
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/NDX-Index-NASDAQ-100-Stock-Inde-2022-10-05-10-10-27-1024x723.png)
Trade ideas – elon’s wake
TSLA remains a core short idea and now has a DeMark Sequential Countdown on day 3 of 13, continuing the trend lower with a Propulsion target of 216. Have fun with Twitter, Elon.
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/TSLA-US-Equity-Tesla-Inc-Hedge-2022-10-05-09-46-26-1024x723.png)
I’ve been short XLY too with the Sequential still in progress
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/XLY-US-Equity-Consumer-Discreti-2022-10-05-10-56-09-1024x723.png)
Another reason I am short XLY is Tesla is 20% of the Consumer Discretionary ETF
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/Screenshot-2022-10-05-105916.png)
I remain short ARKK, although not with the weighting I had when I put it on above 50. Cathie Wood and her team have purchased more Tesla shares. 350k shares in the last 30 day and 275k shares in the last 7 days.
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/ARKK-US-Equity-ARK-Innovation-E-2022-10-05-11-01-13-1024x723.png)
Hedge Fund Telemetry ETF Percentage Price Oscillator Monitor
The PPO monitor (percentage price oscillator) force ranks ETFs by percentage above/below the 50-day moving average. For information on this monitor please refer to this primer. This monitor is offered to Hedge Fund Telemetry subscribers who are on Bloomberg. A mostly solid red day except for energy which we have some long exposure on the long side. Seeing many now above the 10 day is a good start with some more upside needed to clear the 20 day.
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/screenshot_1664981703195-1024x935.png)
Index ETF and select factor performance
This ranks today’s performance with 5-day, 1-month, and 1-year rolling performance YTD. Short baskets are down the most today along with ARKK
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/screenshot_1664981713153.png)
Goldman Sachs Most Shorted baskets vs S&P Indexes
This monitor has the S&P indexes and the Goldman Sachs most shorted baskets. Today the shorts are pressing lower.
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/gs-short.png)
DeMark Observations
Within the S&P the DeMark Sequential and Combo Countdown 13’s and 12/13’s on daily and weekly time periods. For information on how to use the DeMark Observations please refer to this primer. The extra letters at the end of the symbols are just a Bloomberg thing. Worth noting: It’s a little quieter vs the last few weeks when we had a lot of buy Countdown 13’s
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/dm-spx-1-1-1024x605.png)
Major ETFs among a 160+ ETF universe.
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/dm-etf-2-1024x323.png)
Euro Stoxx 600
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/dm-euro-stoxx-1024x712.png)
Bond, Currency, and Commodity Bullish Sentiment
Bond bullish sentiment
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/Screen-Shot-2022-10-05-at-12.37.47-AM-1-1024x208.png)
Currency bullish sentiment
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/Screen-Shot-2022-10-05-at-12.38.00-AM-1-1024x617.png)
Commodity bullish sentiment
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/Screen-Shot-2022-10-05-at-12.38.15-AM-1-1024x673.png)
![](https://www.hedgefundtelemetry.com/wp-content/uploads/2022/10/Screen-Shot-2022-10-05-at-12.38.26-AM-1-1024x340.png)
If you have any questions or comments please email us. Data sources: Bloomberg, DeMark Analytics, Goldman Sachs, Street Account, Vital Knowledge, Daily Sentiment Index, and Erlanger Research