Market teasing with big levels
SPX - say hello to the 50 day moving average
SPX is approaching the 50 day moving average. The big trend channel since March lows is still intact, but watch for a possible break down eventually. Momentum has changed rapidly...100 and 200 day moving averages remain way lower.
Source: Refinitiv
NASDAQ hitting the 50 day
NASDAQ is currently trading right on the 50 day moving average. 15200 is a short term level to watch, but the bigger support is at 15k. NASDAQ is now established "well" below the channel and pretty much all bigger candles since recent highs are all bearish.
Source: Refinitiv
The Italian job
Major banks puke in a chart. Main bullets via Goldman's financials team:
1. Tax unlikely to be one-time due to ongoing government funding needs.
2. Concerns over European banking policies, ECB changes, and political deposit costs.
3. Uncertainty about banks' dividend payouts and impacts of pre-tax earnings.
4. Speculation on next populist government moves and consumer cost pressures.
5. Possible redefinition of NII to mitigate taxes.
6. Potential loan repricing by banks; implications of tighter government control.
7. Retrospective tax emphasizes increasing deposit rates.
8. Mismatch between expected and actual tax figures reported in media.
Source: Refinitiv
Gurley on the illusion of massive Dry Powder
1. undrawn VC dollars are not on the IRR clock. There is no urgency to draw them down. The money isn't actually at the VC firm, they are still sitting in the coffers at the LPs. No VC firm I have ever been exposed to feels "pressure" to "get dollars to work."
2. On the back of a market reset, & w/ portfolio valuations being slashed, GPs are mostly sharing bad news w/ LPs. No GP wants to look aggressive/carefree.
3. outbound liquidity from VCs (IPOs/M&A) are at a 15 year low (all but stopped). (Bill Gurley)
Equity sentiment off highs
The average percentile of 16 different equity related sentiment indicators is a tad off the levels seen one month ago, mainly driven by put/call volume and VIX.
Source: Goldman
Earning sentiment up
Earnings sentiment in the US (measured as number of upgrades vs number of downgrades) is spiking, but not as much as during the last reporting season.
Source: FactSet
Soft landing spike
"Soft landing" is all the rage in the news these days.
Source: @AyeshaTariq / CITI
Oil - cork in water
Oil managed reversing a big down day. If this is a hanging man candle is to be seen, but one thing is sure, the lower inflation narrative is looking "problematic". Chart 1 showing today's huge candle, chart 2 oil vs 10 yr breakevens.
Source: Refinitiv
Source: Refinitiv
Oil volatility - what stress?
Oil volatility, OVX, continues printing new recent lows on a daily basis. The gap vs VIX is getting very wide...
Source: Refinitiv
VWAP machines turned on
We are exiting the corporate blackout window period. Time for all those VWAP machines to get busy.
Source: GS
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