Daily Market Review – 11th October 2021

 Daily Market Review – 11th October 2021

As promised yesterday, the day was exciting…I mean choppy. Rates rose along with the US Dollar bringing pressure on the Nasdaq. Gold shone but its glitter was stolen by Bitcoin.

10 Year Treasury Index

10 Year Treasury Yields continue to advance in a steep ascending triangle. RSI is Overbought  on 180 day 4 hour chart as well as 1 Day 1 Year chart. This would need to be digested which could happen with a slight correction or with some consolidation.

$TNX (Source Think or Swim Desktop App )

US Dollar Index

US Dollar continues to rise as US economy opens up shrugging off Delta Fears and continues to be safe haven in the current tumultuous times. This is likely to continue as there is lot of pressure on global economies due to rising energy costs to downright unavailability of fuel due to disrupted supply chains. 

$DXY (Source Think or Swim Desktop App )

Inflation Surprise Index

Inflation is not so transitory as its been made out to be. Fixed Costs and Wages once incurred will continue to reflect on product pricing. Increasing fuel costs including Coal, Crude and Uranium add to the woes with disrupted supply chain. Citi’s Global Inflation Surprise index is at never seen levels and world has started to take note. India has started to taper and some countries have started raising interest rates. Though they are not addressing the root cause of the inflation that happens to be supply chains and there is not much that can be done until those are fixed.

Citi Global Inflation Surprise Index – Bloomberg Terminal (Source Twitter Feed)

Lights Sweet Crude Oil Futures

Crude goes in the same direction as inflation though with the dollar getting stronger there is  chance that it could consolidate. We see the RSI is extended into overbought region and volumes look very strong. Unless we see OPEC change its stance or United States start accelerating Shale output the prices are likely to increase. There may be some sideward consolidation or a down day as RSI indicates overbought conditions.

/CL  (Source Think or Swim Desktop App )
Invesco DB Commodity INDX 

Commodity Index ETF has seen amazing returns for the year and continues to rise higher. This is likely to continue as we see inflation across the globe.

BTC/USD

Bitcoin thus far seems to be correlated to the markets though today was a surprise when it rose. It too being a dollar denominated asset class should have shown bearish movement though it is too early to draw conclusions on what indicators have direct correlation on its prices.

Micro Mini S&P 500

S&P 500 continuous to be weak and no indicators seem to indicate incoming strength. Though what remains to be seen is the earnings on Financial Sector coming in this week. Rising yields could bring in some bullish movement provided earnings reflect it.

/MES  (Source Think or Swim Desktop App )

E-mini Nasdaq 100 Index Futures

Rising rates caste a shadow on Nasdaq and Tech sector looks to be bearish.
Net Net
 
Markets went green for sometime today AM which looked a little reassuring though things turned fast to close in red. These are interesting times and the market continues to keep everyone, investors & traders second guessing themselves and on their toes. Taper in November, Debt Ceiling decisions pushed until December and CPI numbers coming in this week promises an exciting ride.
 
– Mr. Egg Head
10/11/21, NJ, USA
 
PS:
Not Investment Advise
Forgive my grammar 🙂 

 

Mr. Egg Head

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