Delta1trader Technology - Daily Market Report

[Delta1trader Technology]

Market Report Tuesday 17th of March 2020



United States

US Futures are pointing to a bounce when the markets open today following the DJI average’s third-worst day ever. After yesterday’s market close the futures market has been very volatile and all three US indexes Futures triggered their upside limit earlier in today. Trump promised last night that US will be powerfully supporting those industries, like Airlines and others, that are particularly affected by the virus. Yesterdays market lows might set a floor for now, a however weak one, but even with markets coming up today we expect markets to be extreme volatile and in best case sideways for some time.

Europe

All European markets are slightly down today mid trading session, continuing the decline from yesterday. S&P Euro is down around 1,2%, all sectors are down except Materials which is slightly up.



Oil

The oil price keeps its volatility alongside equities markets and Brent Crude oil is now in a trading range at $29,5 - $31. WTI being slightly less volatile and seems to have a lower floor around $29. Saudi Aramco said it would likely continue with a planned oil production hike from April into May, suggesting it was “very comfortable” with an oil price of $30 a barrel. The oil price war front between OPEC and Russia seems to remain for now.



Summary

Markets continue with a record high volatility triggering trading limits, but we might have seen the worst sell-off rallies for now. Investors which are not wiped out by this market crash might start to carefully push the buy-button at these levels and we will see the markets starting to hold again. Most states all around the world seems to recognize their responsibility to save the markets with every tool in their toolbox.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Wednesday 18th of March 2020



United States

Last night’s negative trading session in Asia sent Europe down in today’s session and US Futures hit limit down halt, amid unprecedented volatility from coronavirus crisis. Wall Street continue to be an unprecedented roller-coaster ride with its extreme volatility swinging the markets in all directions crushing every good calculated guess for a direction. There is none.

Europe

As mentioned above European markets followed Asian markets down, S&P Europe is down 5% mid trading session. All sectors are down with Industrials as the worst and Telecom as the best performing.



Oil

The price floor which seemed to evolve around $30 for Brent Crude oil was not very robust, as predicted, and is now trading at the January 2016 low for $27,7. However, at these levels we believe the downside to be even more limited, but any bigger positive moves will be absent as long as there is no positive moves in the oil price war. The coronavirus lockdown is decreasing the oil demand as well.



Summary

Roller-coaster markets continue its ride intraday and on a day-to-day basis. However, as mentioned earlier we believe the biggest sell-off pressure is losing its momentum for now and long-term positions starts to build on these levels.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Thursday 19th of March 2020



United States

Yesterday’s session was another negative day with new lows and markets closing slightly up from the very bottom. US indices ended down 4-6%. Treasury yields rose 22 basis points to 1.18% following a rise of more than 30 basis points on Tuesday as it rebounds from record lows. Senate is expanding paid leave and unemployment benefits in response to the virus as a part of what’s expected to be a whopping governmental response to avoid downturn.

Futures are this morning pointing down for a negative open at 0,8-2% at S&P500, DJI and NASDAQ.



Europe

European markets are not trading at any specific direction today as the S&P Europe is slightly up for the day at 0,3%. Energy sectors are slightly rising after yesterday’s absolute slaughter in the oil price, Telecom is still preforming well compared to others as investors believe the companies will be able to benefit from the rising usage of mobile data and internet in general. ECB €750B bond program bring relief to yields and spreads in the region.

Less liquid and oil corresponding currencies being hit hard, investors seeking to safer havens as USD.



Oil

Yesterday was an absolute massacre of the oil price as the oil price war carries on and there is an absolute absent of liquidity in the market. Brent Crude Oil spot price was dumped to $24,3, futures contracts bouncing up today. Both OPEC and Russia keep their positions and we believe the oil market will be crushed until their next meeting in June unless one of them seeks back to the negotiation table.



Summary

The markets have been on an unprecedented roller-coaster ride amid the coronavirus turmoil, reinforced by lack of liquidity and pure fear. However, as mentioned in earlier reports it seems like the worst downturn is behind us for now as the states tries to support the markets with bond programs and long-term investors which are not wiped out start building positions again.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Friday 20th of March 2020



The market remains very fragile and it looks like any recovery is still an opportunity to sell into in the equities and Crude oil. The market needs to see more direct financial support to businesses to avoid a bankruptcy spiral and the amount of Corona cases in Europe and the USA to flatten out or fall, before we get a meaningful recovery. It also seems that the commercial mortgage market in the USA in on the brink of collapse, which undermines the risk of a bankruptcy spiral that would be causing shock waves across multiple markets as bank would get big increase of defaults.

In the FX market the volatility continues to rise, and we had a huge fallout in the Norwegian Krone yesterday on a massive stop loss move as NOK moved to all-time lows across a multiple of currencies. It still seems that the USD should perform decent as long as the risk off environment is dominant.

Crude oil is up this morning on what is looking like a front running of the news the that US will buy crude for the Strategic Oil Reserves. We really need to see an OPEC deal to get this to close above 30 USD per barrel in my opinion.

Equities are also higher on risk buying across the board this morning; however, it looks difficult to move much higher until the imminent risks discussed above has been really addressed.





Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Monday 23rd of March 2020



United States

Sunday open sent US Futures straight down to a limit low, but has made it way slightly up in the mid trading session of Europe indicating a open at around 3% lower than Friday close. This after Washington failed to agree about an economic stimulus and rescue plan Sunday. However, we believe the Senate to come to an agreement within the next 24 hours. The package is said to ending up being worth between $2-4 trillion, markets awaiting the outcome after stocks suffered their biggest one-week decline since the financial crisis on 2008.



Europe

European stocks are trading lower today sending S&P Europe down 3.7% mid trading session, trading at last Wednesdays low. Markets are widely down across all sectors, Industrial sector worst preforming at down 5.5%. Increasing numbers of Coronavirus-affected people, both deaths and infected, across countries continue to contribute to the negative sentiment.



Oil

Market opened Sunday sending the Brent Crude oil price down to a new low at $24.70 but has obtained some of the fall through the night. Now trading at $25,70. The sentiment continue bearish as the oil price war stands its ground and each day there seems to be yet another trapdoor lying beneath oil prices and we believe expect to see prices continue to roil until a cost equilibrium is reached and production is shut in.

Summary

Investors are waiting on Washington to agree to an economic stimulus and rescue plan, oil keeps tumbling and Coronavirus numbers continue to rise – markets will continue its volatility. As mentioned last week equities seems have seen the worst hits for now, but oil is still a sell on rallies and USD continue to be the preferred safe haven. Any substantial rise in equities markets will be unseen until the world gains control on the Coronavirus.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Tuesday 24th of March 2020



United States

Monday US 2 of 3 major indices ended down, DJI and S&P500 took both a fall at 3% from Friday close and NASDAQ ended slightly up 0.18%. Tuesday all three indices hit limit up in the pre-market futures trading. Stocks hardest hit by the shutdowns resulting from the coronavirus led the gains in premarket trading. Market expecting Senate to close a deal on a >$2 trillion stimulus bill any time now which could trigger some relief for the investors, any further delays to the stimulus bill would most likely send the markets back down.



Europe

Mid trading session all European markets and sectors are in positive territory with S&P Europe up 5.3% today. Energy sector is the biggest contributor to the gains in the markets up 11% driven by higher oil price. Markets continue to watch the coronavirus development in the region and whether all the sanctions are working as expecting, taking down the development of people with symptoms or proven virus infection.



Oil

The volatility continues in the world’s biggest commodity and the oil price has gained back its massive loss yesterday, Brent Crude oil currently trading at $28 and above Friday close. As the overall market sentiment grow more positive to a control of the virus outbreak it contributes to the commodity price as well. However, we do not expect the oil price to get back in pre-corona territory straight away. The worlds consumption of oil will be lower as the demand is driven down by slower growth, especially in China. And the oil price war with higher production rates at the same time will obviously continue to destroy the oil market as long as it holds on.



Summary

As mentioned yesterday investors are overall waiting for the US stimulus package to be agreed on, the sentiment seems to be more positive now for a deal very soon. This US economic stimulus and rescue package could help the markets to reinforce the lower floor for now and maybe give some relief to investors. However, it is the development of the coronavirus and its long term effects to the companies which will be the main thing the market is pricing.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Wednesday 25th of March 2020



United States

US stocks had a historic rally yesterday and futures for all three major US Stock indices are pointing up 1-2% today 3 hours before market open. The futures move came after Senate finally agreed on a massive $2 trillion coronavirus stimulus bill, sending some optimism to Wall Street. However, we don’t believe this to be enough for a market recovery, it will only act as a market stabilizer. Only an improvement of the coronavirus-situation and world getting back to more normal operations would send markets to recovery. Nobody knows how the world will look like after this, it all depends on the time we stay in shutdown and halting the world markets.

Europe

Europe over all followed yesterdays strong session in US and Asia in its first half of trading session but has now turned into a falling curve again. The S&P Europe is still in positive territory up 0.8% for the day. Consumer Discretionary as the most gaining sector for the day.



Oil

As predicted and still counting the oil price continue to be extremely volatile. Brent Crude oil is currently trading at $26.40 back from yesterdays highs at above $28. The commodity is now constructing a trading corridor at $25-28 after the masse price fall earlier this month. A best-case scenario for now would be the floor around $25 holding, but no bull rally as long as the oil price war and coronavirus-situation is present.



Summary

The US stimulus package is now agreed on and the market sentiment seems to be more positive for now, preventing or at least weaken any further major losses in the equities markets. Coronavirus-situation is still the key and markets are awaiting an improvement before any price recovery. How strong the recovery will be depending on the length of this world lockdown. This is obviously damaging many companies and markets badly, making losses greater for every day.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Thursday 26th of March 2020



United States

US markets continues its volatility and indices lost their momentum into yesterdays close, DJI ending up 2,39%, S&P 500 up 1,15% and NASDAQ down 1,11%. Futures tied to the three indices are pointing towards a slight fall between 0,5 and 1% when markets open in 2 hours. Investors brace for an expected record spike to the US national weekly initial jobless claims data being released today. Trump pushing to take back the country to more normal operations as soon as possible as this lockdown is crashing the economy more for every day.



Europe

All sectors in European markets are trading lower at todays session, S&P Europe taking a drop at 1,79% mid trading session. Energy sector is again dragging the markets down with a drop of 3,89% as the oil price falls, Consumer Staples best performing with a loss of 0,84% for the day. Coronavirus-situation is still concerning markets as numbers keep increasing across the world.

Oil

Volatility continue to be extremely high in the commodity as already well known, for the same reasons as earlier. Brent Crude oil is currently down 1,45% for the day.



Summary

The US stimulus package is now agreed on and the market sentiment seems to be more positive for now, preventing or at least weaken any further major losses in the equities markets. Coronavirus-situation is still the key and markets are awaiting an improvement before any price recovery. How strong the recovery will be depending on the length of this world lockdown. This is obviously damaging many companies and markets badly, making losses greater for every day. Today’s US weekly jobless claims data is expected to be a huge number of 1.64M today. The expectations are all over the place with CITI expecting 4m, UBS at 800k, and Goldman at 2m. So maybe something of less than 1.5m could be positive. The bottom line for the markets at the moment is really how long the Corona virus lock down will last. Will it be for a few more weeks or will it last until the summertime in some form? I think that the US cannot afford to run a lock down for more than 2 more weeks, after that the economy will start to see major fall outs and bankruptcies. I think Trump will try to avoid this scenario at all cost, he needs the economy to survive in decent shape going into the US elections later this year.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Friday 27th of March 2020



We expect some profit taking in the USD today given the recent days sell off. Next week’s US non-farm payrolls is expected to be really bad and that is causing the recent USD selloff together with increased Corona virus cases in the US. The Fed stimulus is also a driving factor for weaker USD. The Fed is basically looking to support equities and drive interest rates and the USD down. That is the driving factor behind the strong Gold prices of late. The move higher in the US equities yesterday ran into the key resistance area and it was not able to really break above that. So, I am thinking that the normal reaction this morning for US equities would be to test lower and try to find a level where buyers would be interested to get in to try and rally the market up towards the high last night and break higher. The other scenario would be more of a downtrend day. It looks like there is still a bit too much uncertainty around the timeframe and impact of the Corona virus to get the market to rally much higher at the moment.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Monday 6th of April 2020



For the first time in 3 weeks, the US equities, didn’t gap lower at the Asian open. It seems that the US Senate is trying to put together a package to help the Airlines, which is putting a bid into risk at the start of the week and also helping Crude recover in Asia following the over 2 USD per barrel gap lower after the virtual OPEC meeting has been delayed until Thursday, following inability by Saudi and Russia to come to the table. I am hearing that jet fuel demand is down 75% following the halt in most Airline services. Some positive news on the Corona virus, Italy levelling out the amount of new cases and death toll is slowing a bit. However, I am thinking that we need to see a week of improving data to really make any big difference in the sentiment. It looks like the next couple of weeks will be absolutely key with regards to the risk sentiment pricing. To me it looks like the market is pricing for a return to normal activity in the next 4-6 weeks in the US. Any news that would delay that outlook would likely be negative for the equities. I am also a bit concerned for the implications of a possible bankruptcy spiral kicking in, in the next 2-3 weeks. Don’t think most businesses are able to sustain for very long without much cash flow, especially in the Travel industry. Who will book any Holiday’s in the next 6 months? probably not many.



The Nasdaq futures saw a triple bottom end of last week and have now broken above the neckline, meaning bullish above 7660 today. Key resistance around 7885 and 8000.



Gold see key support at 1625, which needs to hold to open for a move higher towards 1675 resistance, which has failed twice over the last couple of weeks. Swiss refineries are set to open again this week, so will be interesting to see if that has any impact on the price.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Tuesday 7th of April 2020



Big risk on rally yesterday and it continues this morning. Was huge volume on the break higher into the close last night, so it looked apparent that the shorts were stopped out and the move higher was also a lot of short covering. We have now basically retraced 50% of the down in most US equity indices. To me it looks like the market is front running this risk on. The outlook now is that things will work out very smooth and the Corona virus is pretty much going to be a smooth solution. It might be a bit aggressive until we see more data supporting that fact in, especially NYC. It also looks like short sellers are covering their positions ahead of the Easter Holiday. I think it will be a bit more problems ahead of us and looking at several European countries it has taken several weeks to see the light at the end of the tunnel on the corona outbreak. It looks like in general that it will be important to keep the approach flexible and accept that the equity market could easily move back towards the all time highs seen earlier this year or it could also fall below this year’s low.

Gold is made it up to 1712 this morning but was not able to hold the 1700 level and it now back towards the day’s low at 1693.

Another thing to note is that the correlations between different assets are a bit all over the place over the last couple of days. So, I think that indicates the market is just very confused how to price different assets at the moment. Today’s will be very interesting to see if the market can hold the gains created over the last few days. That is going to be key to avoid a fall back to test the breakout levels from yesterday.

Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Wednesday 8th of April 2020



We saw wide ranges in most markets yesterday with some interesting reversals in both equities and gold. Gold futures topped out at 1742 and move back below 1700 rather quick. It since tested and held 1670 support. So, the key levels for now remains 1742 resistance and 1670 support. A break out of this range is interesting. Nasdaq futures traded to 8303 and failed, following the nice rally last 3 days. It now looks to me that the risk on rally over the last 3 days was overdone on lots of comments from different sources how the Covid 19 virus data was looking better and put simply that it will all solved with lots of stimulus money. I think we are far from that point and with both the France, Spain and US numbers continue to be very high. With a neutral look at the COVID 19 data of new cases and death, I just don’t see any huge improvement. Therefore, I think smart money sold into the rally and looking to buy back lower after the high’s yesterday pretty much was around the 50% retracement level of the move from this year’s high to the yearly low. I would not be surprised if we move even lower in the next few trading sessions.

Another very interesting subject is crude oil and OPEC + meeting tomorrow. It looks to me that Russia holds the best cards going into the meeting. Russia break ever for their economy is about 40 USD per barrel, while Saudi is more like 58 USD per barrel. Meaning that Russia can live longer with lower prices than Saudi could. Then of course FX reserves and other factors play into the equation, however it gives me a simple outline of who would be more interested to see bigger cuts, meaning Saudi. I think we need to see an agreement to cut at least 10M barrels per day to avoid Crude going much lower. Anything less I would not be surprised to see crude trade below 20 USD per barrel. A cut of 15M per day would mean a substantial rally and likely a move back above 32 USD per barrel in my opinion. Iran will likely not cut anything since they are under sanctions and China is not doing anything. Iraq is mostly an ally of Saudi, so they will likely follow what the Saudi will do. Meaning, the big play is really going to be between USA, Saudi and Russia. So watch out for comments from any of those countries. The top 6 producing countries in the word account for 60% of the total output of 80.6M barrels per day:

USA – 15M barrels

Saudi – 12M

Russia – 10.8M

Iraq – 4.4M

Iran - 3.99M

China – 3.99M

Total of 50.18M

Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Thursday 9th of April 2020



This morning I see more news of extended lock down period across Europe. The amount of new Corona virus cases rose in Germany, which is a bit surprising to me as it looked, they had things going the right way. However, we should not make too much of a day’s single number. Equities is slightly down at the time of writing, but that top from Tuesday is still in the background containing further gains for the moment and below we have a good break out from the previous range. So, at the moment it looks like sideways to lower prices is most likely. I still think that there were plenty of sellers in the equities on the highs Tuesday, so if that level holds, this is still just a bear market rally. If, we were to trade above those highs it would be more looking like a V shaped bottom. FX markets are quiet so far today. Gold is holding key support at 1665 so far today, but still not able to recover back above the 1700. We have the OPEC + meeting later today and as I outlined yesterday:

It looks to me that Russia holds the best cards going into the meeting. Russia break ever for their economy is about 40 USD per barrel, while Saudi is more like 58 USD per barrel. Meaning that Russia can live longer with lower prices than Saudi could. Then of course FX reserves and other factors play into the equation, however it gives me a simple outline of who would be more interested to see bigger cuts, meaning Saudi. I think we need to see an agreement to cut at least 10M barrels per day to avoid Crude going much lower. Anything less I would not be surprised to see crude trade below 20 USD per barrel. A cut of 15M per day would mean a substantial rally and likely a move back above 32 USD per barrel in my opinion. Iran will likely not cut anything since they are under sanctions and China is not doing anything. Iraq is mostly an ally of Saudi, so they will likely follow what the Saudi will do. Meaning, the big play is really going to be between USA, Saudi and Russia. So watch out for comments from any of those countries. The top 6 producing countries in the word account for 60% of the total output of 80.6M barrels per day:

USA – 15M barrels

Saudi – 12M

Russia – 10.8M

Iraq – 4.4M

Iran - 3.99M

China – 3.99M

Total of 50.18M



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Tuesday 14th of April 2020



The equity market is in rally mode today and we are approaching some key resistance levels in several equity markets. It looks now like the equities is pricing in a V shape recovery and the Corona situation is basically already solved. I still see large potential risk that this Corona virus situation can last for quite some time. It looks like lots of the cheap money is being channeled back into stocks based on the concept that it is no other place to place the funds. Not sure this is the right strategy at these levels, because there will be fall outs in several sectors before this crisis is over. Oil sector is in big trouble and the demand side is likely to stay low for quite some time. Very few that will book any major Holiday in the next 6-12 months with the current outlook being so unclear. The OPEC+ deal avoided a total melt down short term for the oil price, but it looks like it is not enough to really get prices back above 30 dollar per barrel, which is key to avoid a round of bankruptcies in that sector over the next 3-6 months. IMF projection is for a decline of 3% in world GDP in 2020, then a 5,8% growth in 2021. To me that sounds way over ambitious in terms of the 2021 numbers. It all looks like the Central Banks as desperate to keep the assets prices up and protect the banks balance sheets to avoid a systemic crisis, which it the only strategy that makes sense now. However, it is also a risky play, there are limits for how much debt that can be piled on without the risks for total collapse rising sharply. We also must remember that a lot of small business are not making any huge profits, but marginally positive and employees a good amount of people. Most of these firms cannot add a lot of debt, since they would not be able to pay it back. Logically this can create a hazard system, where all the debt being piled on now to keep business afloat, which be sunk cost as the small business realize it cannot be paid back and they just prefer to bankrupt and start again fresh. Meaning the taxpayers are left taking the loss. Bottom line is that equities can still go much higher, however I think the risk to reward is not favorable buying at these levels now.

As for the current Macro picture, gold should outperform and I think we will see the 2200 level in the not too distant future.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Wednesday 15th of April 2020



The market is lower this morning following a big rally over the last days. As mentioned yesterday, the US markets hit major resistance late last night and a correction lower is expected. At the levels seen last night it looked like the market was pricing in that corona would be solved nice and smooth, which I don’t think is that likely. I will take quite some time before things are back to normal and we will see fall outs in the meantime. Key now is to hold the rising trendlines on the S&P500 and Nasdaq 100 to avoid a reversal much lower. It would be well in the context of normal price action to see a retracement of at least 38,2% of the recent up move, so that would actually be 8218 on the Nasdaq 100 futures and we are trading 8572, meaning some distance lower actually. Given how volatile this market is, that could happen in one day or two.

I want to bring the attention to Gold, because given the current macro with huge QE and rising debt, hard assets like gold should have potential to do really well. I think 2200 level should be very reachable in the next few months. However, I also feel that the long Gold trade is getting more and more crowded, which also means that you can expect more sell offs to make life hard for the buy and hold players. This means that shorting breakdowns could work quite well going forward, along with buying dips.

US dollar is bid this morning also, pretty much on increase risk aversion looks like.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Thursday 16th of April 2020



Equities are back up this morning, following a volatile session yesterday. We had a decent correction lower yesterday in the equities following the big rally over the previous week. I pointed out over the last few days that it looks like all the good news is priced in already and we also see lots of positive comments from the politicians all over the world that things will work out great. However, I think the outlook really depends on getting a vaccine to the market relatively quick. There is no way the economy can sustain being locked down for another 4-6 weeks in the US.

Crude is also below 20 USD this morning and it is clear that the OPEC+ cuts is not enough to make the oil prices rally, at least not yet. The crude inventory data was not very bullish either, so nothing really stands out at the moment to make crude jump much higher. We had news out last night that the US Energy Dept drafting a plan to cut US oil output by paying drillers not to produce. Again, more support packages that will cost the taxpayers money. The free market concept is long gone out the window, it is all Central Bank driven following the Financial Crisis. The politicians and Central Banks are micromanaging the economy and it will most likely just get worse going forward. The debt is so high that any small fall out can break the whole system. That means it is imperative to keep assets prices up and the large amount of QE put in place of the last weeks is basically making the US equities rally, because money have to be put into the market.

I want to bring the attention to Gold, because given the current macro with huge QE and rising debt, hard assets like gold should have potential to do really well. I think 2200 level should be very reachable in the next few months. However, I also feel that the long Gold trade is getting more and more crowded, which also means that you can expect more sell offs to make life hard for the buy and hold players. This means that shorting breakdowns could work quite well going forward, along with buying dips.

US dollar is generally slightly stronger this morning.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Friday 17th of April 2020



Good morning, we have OPEX today, which is options expiration. I will keep it short and crisp today.

Some news out last night that Gilead could have a drug that could work for treatment of Covid19, I don’t know the specifics to really comment that in detail, but overall the Nasdaq (new internet based economy) is outperforming the old economy big. The Payroll Protection Program is out of money already, auch that was fast. Basically, means that this lock down is way too expensive and cannot be going on for much longer. I have been saying for one week now that I think there will be major fall outs if the economy is locked down another 4 weeks, so that is another 3 weeks left. I also think the opening process will be slower than expected and the equity rally is way overdone. My view right now is; long gold on dips and sell small cap equities on short set ups. Crude oil is still weak on very weak demand, think that will continue for another 3-4 weeks until the economy is starting to open up. So could be interesting to start looking at buying some oil in the next few weeks, but more like buy dips and then take profit on spikes.



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Monday 20th of April 2020



Good morning, we are seeing the light at the end of the tunnel of the COVID19 lock down in Switzerland. The outline is for a gradual opening, starting 27th of April through 8 June when it should be back to more or less normal terms. All depends on the development in the next few weeks towards the 8th of June if in fact that timeline will be kept.

Back to the markets, this morning US equities is slightly down in European morning trade with crude oil trading below 15 USD per barrel overnight. I am hearing that Texas oil is sold as low as 2 USD per barrel in the physical market. If the physical market is that low, it means it will be hard to get crude prices much higher in the near term. We must see demand side coming back and the consumption come back to be able to get any real recovery. USDCAD should remain bid with low oil prices.

The equity markets have a low volume area 3-5% below current price that was left unexplored when it broke higher, I would not be surprised if we see a bit of back and fill in the next few week and potentially lower if this area would not hold.

I also think the COVID19 will take a bit longer to get under control for the US and for things to open properly the death rate must fall quite some more. Still looks like small cap stocks have the highest risk for now. Oil stocks is in big trouble and could easily see a big fallout over the next weeks.

Gold looks bullish above 1680 for now and the big level to get above is 1800.

Crude looks weak below 24.60



Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Wednesday 22nd of April 2020

Good morning, we have another beautiful day in Zug, with 22C and sunshine, looking forward to the summer and the economy opening up gradually starting Monday.

We have Crude oil inventory data today, what will be the focus of the day. We still have very wide ranges in Crude and yesterday we saw a low of 6.50 in the June contract after starting at around 20 USD in the morning. Absolute crazy, however the market is just trading the crude storage idea and the structure of the USO ETF and nothing to do with anything else. For longer term prices in crude to really start adjusting higher we need to see the demand side start coming back. Meaning it all depends when the economy around the world starts working more normal. My take is that will take some time. We have the EU summit going on and it will be more QE, just a question on how much it will end up being and the format.

Equities have been correcting a bit as expected over the last few days on outlook being more unclear when the US economy can open up. I said max 4 weeks to avoid major fall outs, there is no way the US can afford paying people to stay at home for long. We have 3 weeks left I think.

For today, Gold looks good following the bounce from 1670 yesterday, need to see a break above 1740 to get things really spiking higher. I am looking for gold to trade above 2000 in the next few months and at least get to 2200 over the medium term.

Equities I expect a more balanced session and prefer to sell rally into the overhead resistance.




Happy Trading

Erik – Delta1Trader Technology

 

[Delta1trader Technology]

Market Report Thursday 23rd of April 2020



Crude have been all over the place over the last week and we have resistance coming in at 16 USD and a break above this level would open for a move back towards former key breakdown level of 20 USD. Crude inventory data was not that bullish yesterday, so that should put a bit of a floor below the crude price for the next few sessions.

Gold looks good and we tested key resistance at 1754 this morning and a daily close above this level would target 1768 followed by 1788 and the eventually 1800 and higher.

In the equities market we have the bears and the bulls fighting hard to swing this market in either direction. One side you have massive QE and the other side you have huge fallout in the economy that could lead to bankruptcy spiral and several ripple effects over the next few years. We have had 9 out of the last 10 days being directional in the US equities market and I expect to see more a range markets for next few sessions, meaning the price is moving around the VWAP through out the day.