Morning market review 10.01.2020

Morning market review 10.01.2020

Good day to all!

Today, unemployment data in the US are released. This is the most important economic data of January. As a rule, after the release of these statistics, there are strong movements in the markets. On the next this week, reports of US companies begin to appear.

S&P500 index - In the morning, S&P500 futures set another historical high at 3,285.25 . The current growth is reminiscent of the situation in January 2018, when the index set a new high every day. Guess what language if growth stops, it is possible, but it does not make much sense. There is no doubt that the growth will stop, and that there will be a correction – too. But it is not a fact that the correction will be strong, and that the growth will not continue again after that. While it is clear that the index, like a magnet, attracts the mark of 3300, it is clear that the growth will continue, rather in total, until the end of January, as the fed continues to fill the market with liquidity and will continue to do so until at least January 20 .

Corporate income and S&P500

You can give many arguments and graphs that prove and show the market is overheated, but while the fed's money is going into the financial system, and US companies continue to increase debt and buy back their shares, it is too early to talk about the word of a growing trend.

Today, we expect the range of 3263-3290.

RTS and MICEX are our Clients the indices continue to grow and set new historical and annual highs, as do the markets of developed countries. New investors, new money go to the market, which is confirmed by data on the inflow of funds. Second-and third-tier stocks are soaring in price. The growth has been continuing since mid-October and it seems that it will not end never.

Yes, the trend is still growing, but the face shows all the signs of a "late bull market", this growth is characterized by a massive influx of retail investors, strong price changes in stocks, the absence of any significant corrections and euphoria in the market information space.

Nothing should distract new investors from aggressively investing "in everything that grows". We are still waiting for the growth to continue, but we are looking at sales in the MICEX index.

The key supports for today are located on futures for RTS 159200 on MICEX 312200, and resistances for RTS 161000 and MICEX 315400 .

OIL-the Decline in oil continued yesterday, and there was a new low for this year's BRENT crude was set at 64.55 .

A week of records, a maximum of 71.75 was set and a day later a minimum. Volatility has decently decreased. If the value is yesterday ATR (8) on 4H was about 1.33, then today-0.50, volatility has returned to normal values! Yesterday, we sold put options on oil with a 63 strike at 75 cents, the calculation was to reduce volatility, suspend the decline in oil prices oil and, accordingly, a decrease in the value of options.

After a double breakdown of the level of 65 in the last couple of days, bullish divergence begins to form on large TF, which suggests a rebound in prices up. Favorable external background, risk appetite, should help oil to rise in value, Yes, a strong decline, as well as strong growth, can not go indefinitely and without corrections. Today, at 21-00, statistics on drilling rigs will be released, but the main impact on oil will be data on unemployment in the US at 16-30 .

Trading range of oil prices in BR-2.20 for today (63,78 -64,52) – (66,05 – 66 ,80), for WTI CFD (57 .8 - 58,65) – (60,25 -61)

Precious Metals-Growth temporarily ended in metals other than palladium. In this metal, growth continues, and new highs were set yesterday.

We opened a price spread of 1086.5 between palladium and platinum a couple of days ago, selling and buying an equal amount of metals in monetary terms we believe that this spread will be reduced, especially due to the reduction of palladium. We also opened a long position in platinum, and we believe that this metal will give the largest increase in price at the end of this year. This forecast is based on greater demand for platinum from automakers, and the gradual replacement of gold by platinum palladium to platinum in the production of catalysts. For reference, in 2008, platinum was worth 2,200 dollars, and palladium 180.

After updating the highs of the last 7 years, gold is starting to consolidate. With the war risks gone, it is worth waiting for a correction in oil prices precious metals, which is actually happening the last couple of days.

Today, the trading range for gold is 1540-1562 and for silver is 17.71 -18.13 (spot market prices and they differ from the futures price).

Promissory market – In the morning, the yield on us bonds 10Y (ten-year paper) is at 1.87%, and on 3M (three-month bonds ) 1.52%. Formally, the yield curve on bonds signals the health of the economy, since there is no inversion observed. But this was achieved by the fed buying up short-term bonds. The yield on 30Y (thirty-year bonds) declined, relative to yesterday, and is at the level of 2.34%.

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Good luck, profits and a good week to all !

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