Point 786 Morning Macro Views | 10.10.2016

Charts, Commentary, News, Technical Analysis

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Point 786 Ltd      High Touch Coverage in Technical Analysis     10/10/2016

David Wienke  direct: 708-870-5058   dave@point786.com

 

TRADE IDEAS:

Look for small caps to outperform short term as TFE/NQ holds pivotal support.  EM futures holding a trend line support is a positive; Eurostoxx Banks holding its 200dma as resistance remains a pivotal pt. Treasuries remain negative along with interest rate sensitive stocks (REITs, Utilities). TYZ has 129-20* as key support.  Bund future testing below its 100dma closing pivotal pt will be a key in fixed income. Gold traded a bit below key support last week, but higher today. US$ Index remains positive and any upside momentum would further weigh on gold. 

HIGHLIGHTS:

Columbus Day Holiday in US – latest Fed Minutes on Wednesday*

EQUITIES:   

ESZ has short term .786 resistance at 2161.50 which held on Friday; a short term trend line at 2163.00 and then 2173.50* as upside pivotal pt. SPX has a short term trend line just above its 50dma which remains pivotal resistance area short term.   2136.44 is the 100dma in SPX and initial support.

Dow Industrial are mixed as they hold above the 18000 closing key and below the trend line and 50dma. Dow futures have 18060 as its initial key support.

NQZ continues to hold its extension target resistance area

NASDAQ relative to E-Mini SP: NQ has been a clear outperformer to ES, gaining momentum in mid-July above the trend line and now just hovering above the .786 retracement

TFE/NQ held its .382 retracement on September 16th and we will key this area along with the 200dma in the pair as pivotal support

XLF held key Fibonacci support two weeks ago, and has 19.75 as short term pivotal resistance

Eurostoxx50 future is higher today and has some room before it would test the short term pivotal resistance of 3050*.  2971.5 is the 50% retrace of the recent rally which held overnight.

Emerging Markets Index (futures) holding above this trend line support.

Euro STOXX Banks index is holding its 200dma pivotal pt resistance

EWG/SPY holding its pivotal 200dma resistance

ASSET ALLOCATION MODELS:

DAX vs Bund held its 200dma at the end of September and continues to bump against the .618* retracement which remains pivotal resistance area.

USZ/ESZ seems likely to test its .786* retracement

Gold versus ES gained downside momentum once below its 200dma (green line) and nearing the May low in the pair, but momentum indicators are pretty depressed.  Looking for a pause here.

Gold versus WTI:  gained downside momentum below the 200dma and negative short term below the broken .786 retrace.

TY/WTI:  traded slightly below its .786 potential reversal support

TLT/GLD is mostly positive above the 200dma, but again finding resistance at the .786 resistance are

FIXED INCOME: 

Bund futures are lower for a 7th straight day and a clean settle below its 100dma would be a signal for continued downside momentum potential.

FVZ breaks the .382 support and now nearing the 200dma which it has held above since early January

10 year yield is testing the 200dma which has been a pretty good closing pivotal pt.  TYZ has pivotal support down at 129-20*

USZ6 broke the .382 retrace (164-13). It’s 200dma is down at 163-28;  30 year yield has 2.529% as its 200dma and TLT has its 200dma at 132.68

2/10 yield curve held short term key support, and seems likely to retest the 200dma resistance

ENERGY: 

CLX is holding its .786 (potential reversal) resistance, but the pullback has been minimal thus far.

Dec Brent has settled above its key .786 retrace for three days.  Tested its June 9th high in the rolling front month futures contract (chart two below).

WTI vs ES futures pair; we liked this trade after holding major support in early August and saw momentum after breaking above the short term trend.  Not finding any resistance at the .786 retrace in the pair.

GSCI was a lead indicator after breaking out above its trend line and nearing its .786 key resistance

METALS:

Dec Gold traded a bit lower than anticipated, but back above its 200dma today. Momentum indicators are fairly depressed and has 1283.2* as initial key resistance.

Dec Silver is holding its 200dma support area

Silver relative to Gold: as silver generally leads momentum, the pair trade is holding its 200dma pivotal support area.  SLV/GLD has been even better technically using the 200 day.

December Copper is holding above its 50 and 200 day moving averages, downside initial pivotal pt

CURRENCIES: 

US$ INDEX:   Dec future is slightly higher today and holding a positive theme with settles above its 200dma and the broken trend line.

Yen future: is negative below its broken trend line, but the depressed RSI helped give little momentum below the trend line.

USDCAD:  has the .382 as pivotal resistance area

Dec EURUSD as rolling front month future: lower today and may see further weakness with a settle below its 200dma, and keying the short term .618 as support.


DISCLAIMER:  This is not a solicitation to buy or sell commodity futures or options on commodity futures and should not be construed as such.  Futures and options trading involves substantial risk and is not for everyone.  Such investments may not be appropriate for the recipient.  The valuation of futures and options may fluctuate, and, as a result, clients may lose more than their original investment.  Nothing contained in this message may be construed as an express or an implied promise, guarantee or implication by, of, or from Point 786 Ltd. that you will profit or that losses can or will be limited in any manner whatsoever.  Past performance is not necessarily indicative of future results.  Although care has been taken to assure the accuracy, completeness and reliability of the information contained herein, Point 786 Ltd. makes no warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, reliability or usefulness of any information, product, service or process disclosed.”. 

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