I could break you, mate, in two pieces over my knees. You know it, I know it. I could buy you six times over. I could dump the stock just to burn your ass! Sir Laurence Wildman. BTW he was my favorite character in the Wall Street movie.
- S&P and Nasdaq futures up 0.5% in Friday morning trading, near best premarket levels (see Fed Williams comments). Comes after Thursday’s slide that saw the index’s largest intraday reversal since April’s trade uncertainties. Big tech was down with NVDA unable to hold onto early gains despite a beat and raise; retail favorites, high beta, most shorted, and momentum names underperformed as well. Major indices looking for weekly declines. Treasuries firmer with rates down ~1-2 bps. Dollar index little changed, though yen strength the biggest FX story as it recoups some of its recent slide. Gold up 0.2%. Bitcoin down 3%, though off worst levels. WTI crude off 1.1% and on track for a weekly loss. Natural Gas up 1.75%. Equity bullish sentiment still at ~50% midpoint level and not oversold.
- Market trying to bounce after strong results yesterday from NVDA and WMT failed to heal fragile market sentiment. Today’s upside tabbed in part to dovish comments from New York Fed’s Williams, who seemingly put December rate cut back in play. Market now pricing 70%+ odds of December cut, up from ~20% earlier this week. While initial September payrolls report takeaways Thursday were mixed, also put growth fears back into focus, adding more support for near-term Fed easing narrative.
- A bit of economic data on tap with November S&P Global PMIs and final November UMich consumer sentiment (and inflation expectations) due out this morning. New York Fed’s Williams said he still sees room for near-term rate cut to push rates closer to neutral. Overnight, Philadelphia Fed’s Paulson said she is worried more about the labor market than inflation, but said she remains cautious and each rate cut raises the bar for the next. Boston’s Collins reiterated some hesitation ahead of December’s meeting, said mildly restrictive policy is appropriate. Remarks from Logan coming later today. Overseas, Japan’s cabinet approved $135B in stimulus (consistent with Thursday leaks) amid concerns about JGB issuance. Still a lot of focus on current Ukraine peace push (and its pressure on crude); Zelensky and European allies pushed back today on several key elements of US-Russian plan.
- A few more earnings today, though the Q3 season is virtually complete (~95% of S&P constituents have reported). INTU beat with next-Q revenue growth guide ahead; management talked up payments growth and momentum from Online Ecosystem. ROST highlighted strong customer engagement, raised comp guidance, and said tariff-related costs to be negligible in Q4
- Key Upgrades/Downgrades: Bath & Body Works downgraded to neutral from outperform at Baird. Citi initiates BYD, CZR, PENN, and RRR; assumes MGM, WYNN. Carvana resumed buy at Deutsche Bank. Bath & Body Works downgraded to neutral from buy at Goldman Sachs. Palo Alto Networks downgraded to reduce from hold at HSBC.
market snapshot
economic reports today
premarket trading
US MARKET SENTIMENT
S&P and Nasdaq bullish sentiment was down with S&P at 50% midpoint level and Nasdaq breaking below at 47%. Still a wide delta between the current sentiment and the 20 day moving average of bullish sentiment. The 20 day moving average of bullish sentiment is starting to reverse lower
Bond bullish sentiment holding the 50% level
Currency bullish sentiment highlighted with Bitcoin bullish sentiment oversold at 13% and US Dollar sentiment nearly back in the elevated zone.
Commodity bullish sentiment with mixed action.
US MARKETS
S&P futures 60-minute tactical time frame with a new downside wave pattern. Bounce could be a corrective lower high wave 2 of 5 with potential wave 3 price objective of 6407 if wave 1 breaks.
S&P futures daily is above the TDST Setup Trend support at 6571 with Setup on day 6 of 9.
Nasdaq 100 60-minute tactical time frame with new wave count on the downside. In downside wave 3 with a potential price objective of 23,324
Nasdaq 100 futures daily below TDST support with Setup on day 7 of 9.
Extra charts we’re watching
India’s Sensex and Nifty with new DeMark sell Countdown 13’s and sell Setup 9.
US Dollar Index daily on day 11 of 13 with Combo and Setup on day 5 of 9. Holding above the 200 day.
US 10-Year Yield backing off with Williams comments and perhaps some risk off rotation into bonds.
Bitcoin Daily continues lower with new Sequential on day 2 of 13 and Combo on day 6 of 13. The Sequential Countdown is calculated by comparing the close of the current bar to the high/low of two bars earlier. Each fulfilled comparison produces a number, which helps to describe the stage of the current trend. Unlike the Setup, the Countdown doesn’t have to be an uninterrupted sequence of qualifying price bars; the Countdown process simply stops when markets are trading sideways, resumes when prices start trending in the current trend direction again. Requirements for Combo V1b (default) Each TD Combo close must be less than the close of the prior price bar. The close must be less than, or equal to, the low two price bars earlier. Each TD Combo Buy Countdown low must be less than, or equal to, the low of the prior price bar. Each TD Combo Buy Countdown close must be less than the previous TD Combo buy Countdown close. Combo also starts with the start of a Setup count vs Sequential that can only begin after a completed Setup 9.
DeMark Observations – Euro Stoxx 600
