12 -16 October 2020 Trading week preparation

Every week I share a bunch of stuff.
– Daily signals for MA Crosses and MA breakouts
– Market Reports
– Consolidated market data and more.
https://eod-notes.com/shared-content/


From last week:
Back from vacations.
Took some time to read up on the market and politics, things remain the same. Uncertainty reigns.

This breather from the markets and all things market related worked like a breeze of fresh air. I returned with an open mind and my bias is reset.

Next Week:
Here we go again, a new earnings season is about to kick off. This is going to be interesting because we already had a round of massive stimulus across the world. How companies behaved during these last 4 months will reveal a lot of what can happen until the end of the year.

What I will be watching like a Hawk:

Airlines: Despite all major airlines already have received bailout packages, I think It wasn’t enough. A new round of fresh cash injections will be needed, and coming winter the pandemic travel will get chaotic. Every sneeze or cough will be a covid alert trigger. On the bright side, when the companies report the stocks will probably tank and would be bough on the dip. Airlines like Delta, Lufthansa, Air France, American Airlines, etc won’t go anywhere. They will be bailed out, merged, or restructured. So It´s clearly a buy on the dip moment.

Banks: Especially EU banks, they have been hammered for months, we are taking -50% moves on the stock price. They will provide buy the dip moments across the chart. I am watching Natixis, Banco Santander, Intesa Sanpaolo, and BNP Paribas.

Energy: Major oil has been hammered. Despite WTI rise, oil companies have been the market dog. They are lagging a lot. I am watching major oil like XOM, CSX, RDS, the safest way to play this is through XLE or if you are a European based investor like I am, SXLE.

Earnings Whispers

WTI
Despite the bearish bias on world consumption, the prices of crude futures keep on rising. Inventories keep on drawing down but the world consumption isn´t increasing and with planes, cruises, and a lot of people working from home, the demand didn’t catch up to the supply.

One thing to have in consideration, futures spreads are trading positive, what that means, long term futures are trading at a premium related to the current contract, which indicates market interest.

Market Gauge Dashboard – WTI
Market Gauge Dashboard – Futures curve WTI

Gold
Gold just broke out, again. The massive macro narrative plus the dollar weakness is pushing gold to the moon.

The bull in me really wants a pullback to the $1800 region to buy more.
I will be watching closely the dollar movements next week.

Market Gauge Dashboard – Gold
Oanda Gold CFD daily


SP500
The gift that keeps on giving. Forget bearish bias and fundamentals, this is an all-new market. New rules, ways of trading, and reason.

SP500 broke again and as I suspected and shared a few posts ago, It will revisit the 3500 level.

I am not trading It actively as It is very difficult for me to trade movements I don’t feel comfortable with, despite having the right ideas.

Last few weeks, CME raised the limit of the future up & down, and brokers such us IBRK raised the margins requirements. Market players are preparing for a lot of volatility for the weeks ahead of US elections so we should too.

SP500 Mean reversions for the last 365 trading days
Market Gauge Dashboard – SP500

Dollar
I couldn’t be more wrong about the dollar. It has been beaten and kicked left and right. That being said, I think It´s time for a bounce.
Check the CoT´s for USD, EUR, and GBP:

Both EUR and GBP are crowded long trades and USD started to get some traction on the long side.
If the dollar manages to strike back with a vengeance, you can expect a major commodities pullback and maybe stocks will follow too.

Important note, both EUR and GBP are on top of their mega channels:

Oanda EURUSD / GBP USD Weekly

Other Notes
Insiders keep on selling their bags

Open Insider

Interesting Articles

https://www.visualcapitalist.com/u-s-money-supply-precious-metal-production-2020/

#35: Leigh Goehring On The Generational Opportunity In Energy Stocks Today

Events:
Check the full calendar here:
https://www.investing.com/economic-calendar/

Special notes on:
– EUR ZEW / Industrial production
– USD CPI / PPI / Jobs / Empire State Man. Index / Philly Fed Man. Index / Retail sales / Industrial production

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