Continuation of last Weeks Nervous Market

Coronavirus cases rise in Several U.S. states: Alabama, Florida and South Carolina report record # of new cases for third day in a row on Saturday.

New York governor Cuomo warns he may need to shut down parts of NY again due to a lack of social distancing.  https://nypost.com/2020/06/14/cuomo-threatens-to-shut-down-manhattan-hamptons-over-social-distancing/

U.S. Fauci says lifting of ban on traveling to the U.S. from UK maybe months away, not weeks.

This doesn’t look like the first wave ever ended to us, while market talks of worrying about second wave….https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6

China is experiencing an uptick in cases as Beijing has highest number of new cases in 2 months.

All of the markets are understanding that the combination of the Feds evaluation of the economy last week (highlight that millions of Americans will not get their jobs back soon if at all) with the above worries of increasing, rather than decreasing spread of Pandemic, and valuations that are based on a far more positive scenario unfolding, have the market correcting.

Global equity markets have been on a tear, with Central banks and governments throwing everything at the global economy to support and turn the tide. This week, as we enter the hot days of summer, seems to us that a true test is coming of the bulls vs the bears. Will the market be focused on Pandemic developments once again or will the stimulus and low rates again be the main focus after a short term correction?

Given that 70% of the U.S. economy is consumer, it stands to reason that if many of those receiving aid from the government, are unable to return to work, it will have an affect on growth and earnings going forward.

Key levels we are focused on:

Gold, surprises us that it is retracing in the risk off environment of past 2 trading days. Positioning looks crowded, we still like longer term and look to buy dips.

Unable to break the $1,745/$1,765 key resistance, gold is testing lower this morning.

Support levels: $1,718/20, $1,690 and big support at $1,670/80

Resistance levels: $1,733, $1,745 and $1,760/65 Key resistance.

Trading view, buy on dips to $1,690/$1,700,  wrong on break of $1,670.  We expect volatility to remain elevated so position size should be adjusted accordingly!

Dow Jones index, we are seeing the break lower we have been expecting as the large bounce since March 23rd is running out of steam in the global equity markets.

We see that 27,500 was the top for now.

Support levels:  24,150, 23,850, 22,760

Resistance levels:  25,000, 25,575, 27,500

Trading view:  sell on rallies as we think the correction has more to go. 24,950/25,000 would be first level to look to sell.

Brent Crude oil: Crude is breaking lower on the back of worries of reopening and demand build. Although car activity is picking up, air travel is slowly rebuilding:

Source Flightradar24

Trading view:  We are negative and think $34.50 is a possible target.

Support: $36.50, $35.00 and $34.50

Resistance: $37.75, $38.25 and $40.00

 

S&P 500 CFD index:  has broken key levels and is testing lower.  Index is oversold in the short term, but looks to us as a test lower is in the cards.

Support: 2,920, 2,840, 2,750

Resistance: 2,980/3,010, 3,050, 3,090

Contact us if you are interested in receiving real time trading signals. In doubt? Check out our track record below!

TickerDate OpenedEntry PriceStopTarget PriceCurrent Price% Change
LONG Austevoll Seafood ASA (AUSS:xosl)2020/06/0276.7572.00SPREAD TRADE75.85-1.17%
SHORT Leroy Seafood Group ASA (LSG:xosl)2020/06/0256.75SPREAD TRADESPREAD TRADE56.86-0.19%

Visit our Position Tracker to look at all of our realized trades and proven track record! 
2018: 45 Trades, Hit Ratio 53,66%, Profit +35,87 %
2019:   31 Trades, Hit Ratio 45,16%, Profit +26,97%

– Mark W

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