Daily Newsletter Oct 14 '22
Daily Newsletter Oct 14 '22
MyntBit's Daily Newsletter is dedicated to providing traders with today's recap and bringing setups to watch for stocks and futures for the next trading day.
What is included in tomorrow's game plan?
Daily Recap
Look Ahead - Economic & Earnings Calendar
Key Futures Levels - S&P 500 (/ES) and NASDAQ (/NQ)
Day Trade Stock Ideas - None - alerts will be provided in Discord
Today's Recap
Market Snapshot
Market Heatmap
Sector Heatmap
Market Recap
Thursday's trade ended on a distinctly upbeat note, but that's not how the day started. The September Consumer Price Index (CPI) came in hotter-than-expected and the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average fell 2.4%, 3.2%, and 1.9%, respectively, shortly after today's open. The stock market staged a big comeback, however, after the S&P 500 broke below 3,500. The Nasdaq Composite and the S&P 500 both snapped a six-session losing streak.
It seemed that the rally was driven by technical buyers stepping in when the S&P 500 fell below 3,500, which effectively marked a 50% retracement of the pandemic rally. The S&P 500 put in a new low for 2022 (3491.58) before started on its massive rebound track. That rebound, which saw the index climb back above 3,600, was likely helped out by short covering activity.
Price action in the Treasury, UK gilt, and currency markets supported the rebound effort. Reports emerged before the open that UK Prime Minister Liz Truss might scale back her fiscal stimulus plan, which gave some much-needed relief to the gilt market and British pound after recent volatility. The 10-yr gilt yield fell 33 basis points to 4.19% on the news.
The U.S. Dollar Index, which peaked at 113.92 shortly after the CPI report, was down 0.7% to 112.50 with GBP/USD +1.9% to 1.1315 and EUR/USD +0.8% to 0.9776.
Treasury note yields also peaked shortly after the CPI report but pulled back from those levels. The 10-yr note yield, which reached 4.07% this morning, settled at 3.95%. The 2-yr note yield, which jumped to 4.52% this morning, settled at 4.45%.
A reversal in price action for semiconductor and mega cap stocks, namely Apple (AAPL 142.99, +4.65, +3.4%), were important drivers of the rebound efforts. Apple was down 2.9% at its intraday low and the PHLX Semiconductor Index was down 4.9%. The SOX Index ultimately finished with a 2.9% gain. Taiwan Semiconductor Manufacturing Co. (TSM 66.62, +2.51, +3.9%) was a top performer for the group after reporting favorable quarterly results and guidance.
Another support factor for the rally was the strength in the S&P 500 financials sector (+4.1%), which ended the day at the top of the leaderboard. BlackRock (BLK 566.03, +34.93, +6.6%) was a winning standout for the group after reporting quarterly results this morning. JPMorgan Chase (JPM 109.37, +5.76, +5.6%), which will report its results before Friday's open, was another notable leader.
On the flip side, the consumer discretionary sector (+1.0%) showed the smallest gain today among the S&P 500 sectors; however, it ended 5.3% above its lows of the morning.
Ahead of Friday's open, JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), and Morgan Stanley (MS) headline the earnings reports.
Looking ahead to Friday, market participants will receive the following economic data:
8:30 ET: September Retail Sales (Briefing.com consensus 0.2%; prior 0.3%), Retail Sales ex-auto (Briefing.com consensus 0.0%; prior -0.3%), September Import Prices (prior -1.0%), Import Prices ex-oil (prior -1.0%), September Export Prices (prior -1.6%), and September Export Prices ex-agriculture (prior -1.8%)
10:00 ET: August Business Inventories (Briefing.com consensus 0.9%; prior 0.6%) and preliminary October University of Michigan Consumer Sentiment survey (Briefing.com consensus 58.6; prior 58.6)
Reviewing today's economic data:
Total CPI rose 0.4% in September (Briefing.com consensus 0.2%) following a 0.1% increase in August. Core CPI, which excludes food and energy, rose 0.6% in September (Briefing.com consensus 0.4%) following a 0.6% increase in August. On a year-over-year basis, total CPI was up 8.2%, versus 8.3% in August, but core CPI was up 6.6% versus 6.3% in August.
The key takeaway from the report is the recognition that core inflation has gotten worse, driven by widespread pricing pressures that included another 0.7% increase in the shelter index. This understanding will cement expectations for a 75-basis point rate hike at the next FOMC meeting and stir worries that the Fed will stay on an aggressive rate-hike path longer than hoped.
Weekly initial jobless claims totaled 228,000 (Briefing.com consensus 225,000) from last week's total of 219,000. Continuing claims totaled 1.368 million after last week's revised total of 1.365 million (from 1.361 million).
The key takeaway from the report is that initial claims are still running at relatively low levels that suggest the labor market continues to run hot -- or, at least too hot for the Fed's liking.
Weekly EIA Natural Gas Inventories showed a build of 125 bcf versus a build of 129 bcf last week
Weekly EIA Crude Oil Inventories showed build on 9.88 million barrels after a 3.36 million barrel draw last week
Dow Jones Industrial Average: -17.3% YTD
S&P Midcap 400: -19.0% YTD
S&P 500: -23.0% YTD
Russell 2000: -23.0% YTD
Nasdaq Composite: -31.9% YTD
source: briefing.com
Market Trader by MyntBit
Market Trader Edition No. 8
Earnings Calendar
Economic Calendar
Tomorrow's Gameplan
Futures
/ES - Emini S&P 500
Nobody expected that sort of move! With the CPI print, we opened the day with a huge gap down and we tested 3500 but then we bounced and rallied with a V-shaped recovery all the way to 3697 (this rally seemed like a short-squeeze, as there were too many shorts at the lows). Finally, we finish above the key level from yesterday at 3680.
Key Level: 3660-3670 (this is a key area, which was resistance until today)
To go up, we would need to push above the 3700 level which was held today than a test and a supply zone needs to be tested at 3730 which will serve as major resistance.
On the downside, a break of our key level of 3660 would put us back into the consolidation zone and open up the test of 3630 then we might see a dip to restest 3600.
Daily POC: 3686
60 min
/NQ - Emini Nasdaq 100
NQ was stronger of the indices with the rally that we saw, as we went all the way up to 11142 but rejected down to finish under 11100.
Key Level: 11000 (this is the key liquidity zone, resistance turned support)
On the upside, if we stay above the key level then the next level up is 11100 which we broke but couldn't hold then the next is the HOD at 11150 from today which has served as major resistance.
On the downside, if we break past the 11000 level then the next level down is 11850 which is a key liquidity demand zone.
Daily POC: 11074.25
60 min
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Disclaimer: This newsletter is not trading or investment advice, but for general informational purposes only. This newsletter represents our personal opinions which we are sharing publicly for educational purposes. Futures, stocks, bonds trading of any kind involves a lot of risk. No guarantee of any profit whatsoever is made. In fact, you may lose everything you have. So be very careful. We guarantee no profit whatsoever, You assume the entire cost and risk of any trading or investing activities you choose to undertake. You are solely responsible for making your own investment decisions. Owners/authors of this newsletter, its representatives, its principals, its moderators and its members, are NOT registered as securities broker-dealers or investment advisors either with the U.S. Securities and Exchange Commission, CFTC or with any other securities/regulatory authority. Consult with a registered investment advisor, broker-dealer, and/or financial advisor. Reading and using this newsletter or any of my publications, you are agreeing to these terms. Any screenshots used here are the courtesy of Finviz, Briefing.com, Earnings Whisperer, FXstreet, and/or Tradingview. We are just end-user with no affiliations with them.
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