Market Weekly: October 25 – 31 2020

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FEAR NOT Brave Investors

US Politics

 Strange times But remember The Joker once served as the Iranian ambassador for the United Nations.

US Elections, Stimulus, Earnings

The Week That Was – What Lies Ahead?

Stock Markets

  • On repeat…Another week where politics of hate ramped up a notch, the hate between Pelosi/Biden and Trump is palpable and has raised even further the partisan blinders of both sides.
  • The S&P 500 fell 0.5% (up 7.3% y-t-d), and the Dow fell 0.9% (down 0.7%). The Utilities added 0.9% (down 2.4%). The Banks rallied 3.7% (down 28.6%), and the Broker/Dealers increased 0.4% (up 5.5%). The Transports added 0.4% (up 9.0%). The S&P 400 Midcaps gained 0.9% (down 2.3%)
  • Small cap Russell 2000 increased 0.4% (down 1.7%).
  • The Nasdaq 100 fell 1.3% (up 33.9% ytd ). The Semiconductors dropped 1.6% (up 27.6%). The Biotechs lost 1.9% (up 6.1%).
  • While gold bullion added $3, the HUI gold index dropped 2.9% (up 33.8% ytd).
  • Year-to-date the NASDAQ still outperforms massively,
  • In Europe for the week France’s CAC40 slipped 0.5% (down 17.9%ytd). The German DAX equities index fell  2.0% (down 4.6%). Spain’s IBEX 35 equities index rallied 0.6% (down 27.8%). Italy’s FTSE MIB index fell  0.5% (down 18.0%).
  • In Asia Japan’s Nikkei Equities Index increased 0.5% (down 0.6% y-t-d). South Korea’s Kospi index increased 0.8% (up 7.4%). China’s Shanghai Exchange dropped 1.7% (up 7.5%).
  • EM equities were mixed. Brazil’s Bovespa index rose 3.0% (down 12.4%), and Mexico’s Bolsa gained 2.2% (down 11.1%). India’s Sensex equities index rose 1.8% (down 1.4%). Turkey’s Borsa Istanbul National 100 index slipped 0.2% (up 4.1%).
  • Investment-grade bond funds saw inflows of $6.757 billion, and junk bond funds posted positive flows of $151 million (from Lipper).
  • IPO mania is back in full force with Snowflake an indication of, which more than doubled on debut.
  • This quarters slight reversal was a natural reversion after the bull mania after the Dow ended the second quarter with a 17.8% gain, the biggest quarterly rally since the first quarter of 1987, when it ripped up 21.6%. The S&P 500 had its biggest one-quarter surge since the fourth quarter of 1998, soaring nearly 20%. The Nasdaq Composite jumped 30.6% for the quarter, its best quarterly performance since 1999.
  • Stock valuations, as measured by forward price-to-earnings ratios are near their highest level since the 2000 dot-com boom.

 US Stock Indices Performance

US Indices W 10 23 2020 

Oil and Gas

  • WTI crude dropped $1.03 to $39.85 (down 35% YTD) after two weeks of gains
  • WTI on pace for its worst year since 2014 when WTI lost 45.87%
  • Gasoline sank 2.6% (down 33%YTD ) Natural Gas surged 7.1% (up 36% YTD).
  • Risk markets continue to respond to ongoing negotiations between Congress and the White House over an additional economic stimulus package to boost economic demand.
  • U.S. producers production still under pre Laura levels.
  • Natural gas futures rallied at the end of the week and gained 1.2% (up 27% YTD).
  • Higher crude prices prompt some U.S. producers start drilling again with rigs up for the thirs week in a row.

Silver and Gold

  • Spot Gold was little changed at $1,902 (up 25.3% YTD). Silver gained 1.1% to $24.675 (up 37.7% YTD). 

Forex Markets

  • For the week, the U.S. dollar index declined 1.0% to 92.745 (down 3.9% y-t-d).
  • Majors for the week the euro 1.2%, the Swiss franc 1.2%, the British pound 1.0%, the Australian dollar 0.8%, the Japanese yen 0.7%, and the Canadian dollar 0.5%. (up 4.13% y-t-d).
  • Minors for the week South African rand increased 2.4%, the Norwegian krone 1.5%, the New Zealand dollar 1.4%, the Mexican peso 1.3%, the South Korean won 1.3%, the Swedish krona 1.2%, Chinese renminbi increased 0.16% versus the dollar this week (up 4.13% y-t-d).

Bond Markets (and Fed Watch)

  • Ten-year Treasury yields jumped nine bps this week to 0.84%, the high since June 8th. Thirty-year “long bond” Treasury yields traded as high as 1.69% in Friday trading, the high going back to March 19th.
  • Three-month Treasury bill rates ended the week at 0.085%. Two-year government yields added a basis point to 0.16% (down 141bps y-t-d). Five-year T-note yields rose six bps to 0.38% (down 131bps). Ten-year Treasury yields jumped 10 bps to 0.84% (down 107bps).
  • Long bond yields gained 11 bps to 1.64% (down 75bps). Benchmark Fannie Mae MBS yields increased five bps to 1.41% (down 130bps).
  • The U.S. Dollar Index declined 1.0% this week, trading Wednesday to the low since September 2nd.
  • Freddie Mac 30-year fixed mortgage rates dropped six bps to a record low 2.81% (down 88bps y-o-y). Fifteen-year rates declined two bps to 2.35% (down 80bps).
  • Five-year hybrid ARM rates added a basis point to 2.90% (down 45bps). Bankrate’s survey of jumbo mortgage borrowing costs had 30-year fixed rates down two bps to 3.06% (down 106bps).
  • In Europe Greek 10-year yields jumped 14 bps to 0.92% (down 51bps y-t-d). Ten-year Portuguese yields rose six bps to 0.17% (down 27bps). Italian 10-year yields jumped 11 bps to 0.76% (down 65bps). Spain’s 10-year yields gained seven bps to 0.20% (down 27bps). German bund yields rose five bps to negative 0.57% (down 39bps). French yields gained five bps to negative 0.30% (down 42bps). The French to German 10-year bond spread was unchanged at 27 bps. U.K. 10-year gilt yields jumped 10 bps to 0.28% (down 54bps). U.K.’s FTSE equities index fell 1.0% (down 22.3%).
  • All good while markets hold up but take note that the loosest financial conditions in history have supported a record $1.4 trillion of corporate debt issuance. While easy credit availability has supported economic activity,  funding new investment whilst keeping vulnerable companies afloat. THe combination of urban shifts through virus and riots fears has fueled a booming MBS market and record low mortgage rates pushing strong housing markets into Bubble risk territory.
  • The Fed QE infinity programme is a yield curve control policy with long government bond yields coming down. Bond supply and continued central bank resistance to more negative policy rates limits the move. Central banks have been cutting rates and adding liquidity to avoid systematic failure.
  • Federal Reserve Credit last week surged $65.5 billion to $7.111 trillion. Over the past year, Fed Credit expanded $3.178 trillion, or 80.8%. Fed Credit inflated $4.300 trillion, or 153%, over the past 415 weeks.
  • Fed holdings for foreign owners of Treasury, Agency Debt last week declined $7.7 billion to $3.403 trillion.
  • “Custody holdings” were down $16.7 billion, or 0.5%, y-o-y. M2 (narrow) “money” supply surged $106 billion last week to a record $18.795 trillion, with an unprecedented 33-week gain of $3.287 trillion.
  • “Narrow money” surged $3.639 trillion, or 24%, over the past year.
  • For the week, Currency increased $3.2 billion. Total Checkable Deposits jumped $92.8 billion, and Savings Deposits gained $19.4 billion. Small Time Deposits fell $6.4 billion. Retail Money Funds declined $2.8 billion. Total money market fund assets declined $7.6 billion to $4.356 trillion. Total money funds surged $870 y-o-y, or 25%. Total Commercial Paper gained $11.4 billion to $974 billion. CP was down $114 billion, or 10.5% year-over-year.

 TNX W 10 23 2020


On the Risk Radar

Fed Warnings on Possible Medium To Long Term Risks

Fed Financial Stability Report Risks May 2020

Job Losses

September’s employment report  showed 661,000 jobs added in the month below the 800,000 expected. What we garnered from the anlaysts is a complete miss of the effect of return to school as highlighted by well over 1 million women leaving the workforce and many men also to take care of their children not returning to work. What is clear is the disconnect from the realities by pundits, particarlarly partisn biased rhetoric of the true damage to the economy, the social fabric and the selling of that as a new normal. Covid19 brought with it a new reality of brutal times for workers.

Over 14.5 million are collecting traditional jobless benefits, up from 1.7 million a year ago, with no end in sight. on Thursday, the Labor Department reported under 800,000 Americans applied for unemployment benefits for the first time since the crisis.  With the Covid shutdown we lost over 22 million jobs in March and April. The September employment report, the last before the election, showed a slower pace of job growth than in August. There were 616,000 nonfarm payrolls, from 1.37 million in August. The unemployment rate expected dropped to 7.9% from 8.4%.As economies slowly reopened, the economy generated than 12 million jobs in May through September. Still a huge shortfall in jobs, and the big question is will they come back?

November US Election

With a week to go before the Nov. 3 election, the market is likely to thin out and with that is limkely more volatility, especially if the outcome looks increasingly uncertain. Stimulus stories will be plied around the polls with the probability of having an unclear outcome, contested outcome or both. So far, more than 56 million Americans have voted early, which makes up 37% of total votes from the 2016 election. More than 38 million of these votes have been mail-in ballots. Election experts are predicting a record of 150 million ballots will be cast, meaning the U.S. could have the highest rate of voter turnout since 1908.

The upcoming presidential election is a huge another risk with the intense split along Partisan lines of much of America. RealClearPolitics has President Donald Trump trailing former Vice President Joseph Biden in the polls but a falling margin. A potential for a resurgence in Covid cases will see Trump not benefiting from an economic recovery, and as a result a better chance of Biden being elected. Biden is representative of uncertainty.

Stay alert to the political and geopolitical shifts with the world in flux. Government policies related to the environment, trade and tech sit high on the watch list.  Political and economic agendas that Influence policy-making is top of the list. For the US it is not just external threats, including increased political tensions between countries but also internal threats highlighted by the partisan impeachment devide. Politics influence all, directly or indirectly. 

The virus and psychological affect on domestic and trade relationships have impacted growth strategies with unexpected consequences .  In a  fully fledged stock mania, nothing matters until it does. That is the feral nature of greed.

  • Democrats and Republicans have been far apart in terms of the contents of any stimulus package. Key is the $600 supplemental weekly aid for the unemployed that expired on July 31, and Republicans want to cut it to $200 a week while Democrats want to keep current levels.
  • The two parties are also still far apart on the size of the package, after initially starting out with Democrats at $3 trillion and Republicans with $1 trillion and the latest $300 billion. 
  • President Trump signed an exective order to boost benefits by $300/week if individual states pay an extra $100/week.Additinally there was an order to defer payroll taxes The move also diminishes the urgency to make a deal and gives an indication of Republican strategy.
  • Trump’s polling deficit is larger than any incumbent since George H.W. Bush in 1992.
  • Biden has said he would seek to raise the U.S. corporate tax rate from 21% to 28%, which could potentially eat into profits and weigh on stock prices
  • The first Presidential debate is not until September 29th, so the focus will fall on the several upcoming campaigning events.


  • Geopolitical tensions with China and India are on the rise as China increases military hardware near the China and India’s Himalaya border, a potential negative shock not priced by markets.
  • War between Armenia and Azberjazan has reopened tensions in the region.
  • China tightened its grip on Hong kong and threats with Taiwan continued.
  • Russia is showing the affects of low energy prices, filtering into the socio economic dynamic
  • Brexit and the EU is bubbling along with increasing antagonism with UK PM Johnson wanting  new deal based on Northen Island security anf freedom.

Geopolitically the US-Sino rhetoric is heating up with TikTok, Hong Kong and “China Virus”. We expect continued volatility with the engulfing uncertainty of the Coronavirus and in commodity markets, particularly in oil and other commodities, not to mention unrest in Iran, Libya and Iraq. 

Trade Wars

  • Despite all the US and Chinese rhetoric we are led to believe trade talks between U.S. and China are still expected to recommit to the Phase one deal. China has increased purchases of U.S. oil ahead of their trade deal review, according to Reuters.On a more upbeat note, the UK struck its first post-Brexit trade deal with Japan as it seeks to make a success of leaving the EU.
  • Trump did say Phase 2 will be difficult and he sees the virus more important then trade with China..
  • In addition to rising tensions with China, the United States Trade Representative said last month said that the USTR is considering a new round of tariffs on $3.1 billion in European exports from France, Germany, Spain and the U.K..

Fat Tail Virus Risk

U.S. daily COVID cases have spiked to over 80,000, with Friday setting a new single-day record. Unlike the first two “waves,” the surge in new infections is not dominated by particular metropolitan areas or a few large states. COVID has methodically dispersed throughout the heartland, with rural America in the crosshairs. This is a particularly troubling development for small town hospitals and healthcare systems facing limited capacity and scarce resources. Ominously, outbreaks have slammed many northern states early in the winter season. Over the coming weeks, the virus can be expected to shadow cooler weather advancing south..

Several countries are tightening restrictions and contemplating lockdowns as infections accelerate, prompting concerns about the impact on world economies attempting to recover. 

Covid US EU 10 18 2020

Last week when adjusting for population, the number of new coronavirus infections in Europe has now overtaken the United States, with Europe reporting 187 new cases per million people, based on a seven-day average, compared with 162 new cases per million people in the U.S. as of Thursday. Europe  is reporting an average of roughly 97,000 new cases per day, up 44% from one week ago.

Will virus cases level off in late spring and vanish so things can get back to some sort of normality by late summer? Or will there be a second wave of cases during the autumn/winter, forcing new lockdowns or leading to fear and voluntary social distancing (a W-recession scenario). For how long are you immune after having had the virus, a long time or a couple of months? Will there be a vaccine and when?

  • AstraZeneca and Johnson and Johnson (J&J) announced they had received permission to resume trials on a COVID-19 vaccine. AstraZeneca was on track to have a vaccine ready before the end of the year, while J&J had said its candidate would be ready by early next year.
  • The US deals with a number of pharmaceutical giants have topped roughly $10.79 billion as part of Operation Warp Speed, a program led by several departments within the federal government to accelerate the development, manufacturing, and distribution of vaccines and treatments to fight the coronavirus.
  • The operation aims to provide at least 300 million doses of a coronavirus vaccine by January 2021. The companies are Moderna Johnson & Johnson Sanofi and GlaxoSmithKline Pfizer and BioNTech Novavax and AstraZeneca
  • Hopes and fears of reopening can outweigh mixed earnings results. No surprise after increased testing, weeks of protesting, people in large airconditioning indoors we have record daily U.S. cases. The U.S. reported 1000 deaths 4 days in a row with coronavirus cases,
  • There does appear to a concerted effort to put the blame on an economy reopening and miraclously the mass ongoing priotests have nothing to do with that. Take that for what it is worth. There is little mention of the younger age group in the new cases and much lower mortality rate. Fear is the feature. Use commonsense in your own protection, spreading and decision making.


BE AWARE: Stay rational and be prepared for many alternatives, either way. With crisis comes opportunity. From a market point of view this is not unprecedented, many other bubbles have popped with similar results. What is unprecedented is the pandemic, the mass media and social media fear mongering, the massive QE and printing and the strange era of entitlement and no responsibilty fed down from politicians to the youth of today for electoral purproses.

Put all that together and we see the result.  Again this isn’t unprecendented just a different catalyst and fuel. Stay tuned. take a breath and think clearly. Oh and now we have the riots to throw on the kindling ….

  • Expect the Fed Stability Report warning on what happens if the pandemic worsens to be the go tto by Fed speakers (We are all watching to see if I spike aftet the Floyd protests and riots with no social distancing).
  • The backdrop is the Covid-19 crisis. Despite that the stockmarket is up over 40% from lows and stubborn bears and bulls alike are frustrated based on cognitive biases.
  • We continually focus on overcoming our biases and as the accompanying chart highlights stocks and the economy are NOT the same thing despite what we are told by our influencers and biased or selective recalls.

“Negative yields on long-dated government securities are more reflective of distorted market conditions than of stronger sovereign credit profiles, Fitch Ratings says. Lower interest service costs support sovereign creditworthiness, but this must be weighed against the impact of the economic conditions leading to lower yields and historically high government debt levels in a number of countries.- Fitch”

Akio Morita mistakes

The Week Ahead – Have a Trading Plan

Central Bank Watch speeches, reports and rate moves

  • Monday:Tentative German Buba Monthly Report 10:30 SNB Chairman Thomas Jordan speaks
  • Tuesday 02:00 RBA Assist Gov Bullock Speaks
  • Wednesday 10:00 BoC Rate Statement, BoC Interest Rate Decision 11:15 BOC Press Conference 18:00 USD FOMC Member Kaplan Speaks 22:30 BoJ Interest Rate Decision Tentative BoJ Monetary Policy Statement and BoJ Outlook Report (YoY)
  • Thursday  08:45 Deposit Facility Rate (Oct) ECB Marginal Lending Facility ECB Monetary Policy Statement ECB Interest Rate Decision (Oct) 09:30 EUR ECB Press Conference
  • Friday 12:00 USD Dallas Fed PCE (Sep)

Improvements in some economic indicators, such as home sales, manufacturing activity and  in employment data have bolstered investor confidence and helped extend the rally in stocks. Support in markets comes from the Fed’s balance sheet which has ballooned to $7.2 trillion, and the central bank committed to monthly purchases of $80 billion in Treasury securities and $40 billion in mortgage securities.

 There is some important data in the week ahead,

  • Monday:  US 10:00 a.m. New home sales 10:30 a.m. Dallas Fed manufacturing
  • Tuesday:  US 8:30 a.m. Durable goods 9:00 a.m. S&P/Case-Shiller home prices 9:00 a.m. FHFA home prices 10:00 a.m. Consumer confidence 10:00 a.m. Housing vacancies 4:30 p.m. API Oil Inventories
  • Wednesday: US MBA Mortgage Applications 8:30 a.m. Advanced economic indicators 10:30 EIA Crude Oil Inventories
  • Thursday: US 8:30 a.m.Initial jobless claims, Continuing Jobless Claims 8:30 a.m. Real Q3 GDP 10:00 a.m. Pending home sales 10:30 a.m EIA Natural Gas Storage
  • Friday: US 8:30 a.m. Personal income/spending 8:30 a.m. Employment cost index 9:45 a.m. Chicago PMI 10:00 a.m. Consumer sentiment 12:05 p.m Baker Hughes Oil Rig Count, CFTC Speculative net positions

For emerging markets the lower US dollar is helping the Fragile 5. Argentina and Turkey are still red letter risks with Covid however. Voters will also be going to the polls in Indonesia, the Philippines and Thailand this year.

Over $4 trillion of EM debt matures by the end of 2020, of which around a third is denominated in foreign currency, according to the Institute of International Finance. Nevertheless Banks are telling investors to buy, buy, buy, who is selling you should ask?

If you wanted to play in the big room at Vegas, you are living it. Understand risk and the madness of crowds for your own sanity and wealth.

Focus on yourself and what YOU CAN INFLUENCE, set your trading plan and goals in be set for 2020. One suspects it will be a year long Groundhog day for Trump, the GOP and the Democrats. 

Earnings Week Ahead

This week about a third of the S&P 500 companies report earnings, including large tech names. Microsoft reports Tuesday, and Apple, Amazon, Alphabet and Facebook, plus big oil Exxon and Chevron all report. Big banks kicked off third-quarter earnings reports on Oct. 13, helping to set the tone for the broader U.S. stock market, as businesses cope with the eighth month of the pandemic. Banks reaped the rewards of the initial public offerings and record corporate borrowings during the pandemic. Investors (and algos) will focus pn the conference calls and outlooks. Everyone is expecting the worse. We will see critical updates on production in coronavirus impacted regions and if there is extended halting of operations weighing on multi-nationals.

Last week we heard from Halliburton (HAL) IBM (IBM)  Synchrony Financial (SYF), Albertsons (ACI), Procter & Gamble (PG), Phillip Morris International (PM), Lockheed Martin (LMT)  Netflix (NFLX), Texas Instruments (TXN), Snap (SNAP) Nasdaq (NDAQ), Baker Hughes (BKR), Verizon (VZ), Biogen (BIIB) before market open; Whirlpool (WHR), Chipotle (CMG), Align Technology (ALGN), Equifax (EFX), Kinder Morgan (KMI), Tesla (TSLA), Las Vegas Sands (LVS), Xilinx (XLNX) Coca-Cola (KO), Quest Diagnostics (DGX), Alaska Air Group (ALK), Kimberly-Clark (KMB), Dow Inc. (DOW), AT&T (T), American Airlines (AAL), AllianceBernstein Holdings (AB), Sirius XM Holdings (SIRI), Southwest Airlines (LUV), Citrix Systems (CTXS), Union Pacific (UNP) before market open; Capital One Financial (COF), Mattel (MAT), Intel (INTC) Bloomin’ Brands (BLMN), Nielsen Holdings (NLSN) among others.


  • Monday with HCA Healthcare, Hasbro, SAP, Otis Worldwide, Twilio, Boyd Gaming, F5 Networks, National Oilwell Varco, NXP Semiconductor, TrueBlue, Chegg
  • Tuesday with Microsoft, 3M, Caterpillar, Merck, Pfizer, Aflac, Novartis, Chubb, Advanced Micro Devices, JetBlue, Xerox, Restaurants Brands International, Eli Lily, BP, HSBC, Centene, Stanley Black and Decker, Polaris, Harley-Davidson, Invesco, Raytheon, Crocs, Corning, Cummins, S&P Global, Franklin Resources, Hubbell, Akamai, FireEye, Lattice Semiconductor, Denny’s, Edison International, First Solar, Terex, Varian, Juniper Networks, Merck earnings
  • Wednesday Earnings Include: HCA Healthcare, Hasbro, SAP, Otis Worldwide, Twilio, Boyd Gaming, F5 Networks, National Oilwell Varco, United Parcel, Boeing, General Electric, Ford, ServiceNow, Etsy, Pinterest earnings
  • Thursday Earnings Include: Apple, Amazon, Alphabet, Facebook, Comcast, Twitter, MGM Resorts, Starbucks, Kellogg, Dr. Pepper, Ralph Lauren, Activision Blizzard, ConocoPhillips, Kraft Heinz, Shake Shack, Archer Daniels Midland, Devon Energy, Ethan Allen, Avis Budget, Cheesecake Factory, Hartford Financial, Stryker, Flex Cabot Oil, U.S. Steel, Mohawk Industries, Anheuser-Busch Inbev, Avis Budget, Illumina, Yamana Gold, IMAX
  • Friday Earnings Include: Honeywell, Chevron, Colgate-Palmolive, Exxon, Under Armour, Abbvie, Altria, Charter Communications, Phillips 66,Weyerhaeuser, Newell Brands, Booz Allen, CBOE Global Markets, Total, Lear

IPO Week Ahead

  • After an active September, and ahead of the chaotic US election 13 IPOs are scheduled to raise $5.1 billion in the week ahead. Chinese loan facilitation platform Lufax (LU) is leading the diverse group, which includes a pool supplies retailer, an mobile auto insurer, and two mortgage lenders, among others.
  • The largest deal of the week, Lufax (LU) plans to raise $2.2 billion at a $30.5 billion market cap. The company provides a leading personal financial services platform, primarily meeting the unmet demand for personal lending among small business owners and salaried workers. Lufax has demonstrated solid growth and cash flow generation, though its margins contracted in the 1H20.
  • Pool supplies retailer Leslie’s (LESL) plans to raise $600 million at a $2.8 billion market cap. Backed by L Catterton and GIC, the company is the largest direct-to-consumer brand in the nearly $11 billion US pool and spa care industry with over 930 retail locations across the US. Leslie’s saw revenue growth accelerate in the 9mo FY20 as COVID-19 stimulated consumer demand across the pool and spa industry.
  • Mobile-based auto insurer Root (ROOT) plans to raise $568 million at a $6.1 billion market cap. Root currently operates in the US auto insurance market with plans to expand into other markets in the future. The company is growing fast (+570% y/y), but it is highly unprofitable, with a -16% gross margin in the LTM.
  • The larger of the week’s two residential mortgage lenders, Caliber Home Loans (HOMS) plans to raise $345 million at a $1.8 billion market cap. Caliber focuses directly on the purchase market and is the second largest independent mortgage originator based on purchase volume since 2016. While revenue declined in the FY19, revenue more than doubled in the 1H20, and the company turned profitable.
  • Sanken spin-off Allegro Microsystems (ALGM) plans to raise $325 at a $2.5 billion market cap. Allegro is a leading global designer, developer, fabless manufacturer, and marketer of sensor integrated circuits (ICs) and application-specific analog power ICs for the automotive and industrial markets. Gross margin and cash flows increased in the first half of the year, though revenue declined in both 2019 and the 1H20.
  • Taken private by Mitel in 2015 and now owned by Siris Capital, Mavenir (MVNR) plans to raise $300 million at a $1.8 billion market cap. The company provides a suite of cloud-native software applications for network functionality of wireless service providers, and it is poised to benefit from the adoption of 5G and OpenRAN. The company’s sales cycle is long, and its revenue is highly concentrated.
  • Residential mortgage lender AmeriHome (AHM) plans to raise $250 million at a $1.3 billion market cap. AmeriHome’s flexible and scalable platform has allowed the company to produce strong growth and performance, with 21 consecutive quarters of profitability and production volume growth of 187% from 2015 to the LTM 2Q20.
  • MediaAlpha (MAX) plans to raise $176 million at a $1.2 billion market cap. With strong growth and solid free cash flow generation, the founder-led company provides an automated digital ad buying platform for the insurance industry, a $4 billion market opportunity. Insiders are selling on the IPO, after receiving a $106 million debt-funded distribution last month.
  • Precious metals producer Gatos Silver (GATO) plans to raise $150 million at a $433 million market cap. This pre-revenue company is focused on the production, development, and exploration of silver and precious metals. The company is currently concentrated on the production and continued development of the Cerro Los Gatos Mine, which led to widening losses in the 1H20.
  • Fibrosis biotech Galecto (GLTO) plans to raise $85 million at a $395 million market cap. The company’s lead candidate is an inhaled inhibitor of galectin-3 for the treatment of severe fibrotic lung diseases, including idiopathic pulmonary fibrosis (IPF). The company has conducted a Phase 2a trial in 24 IPF patients and has initiated a Phase 2b trial in 450 IPF patients, with topline results expected in 2022.
  • Diagnostics provider Biodesix (BDSX) plans to raise $75 million at a $521 million market cap. The company provides data-driven diagnostic solutions to discover, develop, and commercialize solutions for clinical unmet needs, with a primary focus in lung disease. The company’s operations have been impacted by COVID-19, with revenue and gross margin falling in the 1H20.
  • G Medical Innovations (GMVD), which provides app-connected medical devices for monitoring vital signs, plans to raise $30 million at a $362 million market cap. The Israel-based company generated just $2 million in revenue in the 1H20 and is highly unprofitable, with a -26% gross margin.
  • Neurological disorder biotech Inhibikase Therapeutics (IKT) plans to raise $25 million at a $152 million market cap. Its lead candidate is a c-Abl protein kinase inhibitor being developed for Parkinson’s disease (PD). The company has filed two INDs and expects to begin the first dosing PD patients following the IPO.
  • Mmedical test developer GBS (GBS) plans to raise $20 million at a $167 market cap by offering units with warrants attached. The company is currently developing saliva-based tests for SARS-CoV-2 and diabetes management. 
  • -comment section below data-

    Geopolitical Tinderbox Radar

    Trade Imbalances IMF

    Italy CDS
    Turkey Geopolitical

    Last Week’s Big Stories

    The Week That Was – Last Weeks Recap



    Stock Markets

    US Major Stock Indices

     Biggest Stock Winners and Losers Last Week*

     Top US Stocks W 10 23 2020

    S&P 500 Index via @KnovaWave

    The SPX recalculated after reacted off +2/8 Murrey Math Daily after 5 waves, We have the 2 clear alternatives of Double top i.e a completitive C or i ? Again it tested and held under Tenkan Friday. Alternatives completed C Wave or a Wave 1. Support is Kijun and cloud and Chikou rebalance. Important to note the high was a retest of the initial breakdown .

    The break up was from above the 200dma. The balance from sharp reversal after the initial 3 wave down from the SPX wave 5 extension as Covid19 fed impulse accelerated under the tenkan. From there we had seen the ABC or 1-2-3 spinning around the 61.8% of the move. Support began at the October 2019 lows. A manic wave 5 or 3 of some degree was a resolution for the ages. Note the 100% extension from the emotive element and MM levels when the spit kicks in. A manic wave 5 or 3 of some degree was a resolution for the ages.  Note the 100% extension from the emotive element and MM levels when the spit kicks in.

     SPX D 10 23 2020

    Weekly #SPX is flagging after at MM +2/8 recalculated. Major support is top of channel and Tenkan. Tenkan key support, bulls failure below. We look for 3 waves down and MM grid for wave clues. Keep an eye on the putcall ratio with recognition to the sheer size of contracts AND keep in mind the stimulus distortion. The spit per channel fractal and Adams rule launched back over the cloud where we were encased AND we are back testing it. Watch if a spit or clear break support as chickou rebalances

    SPX W 10 23 2020 

    Semiconductors SMH

    SMH W 10 23 2020

     Apple $AAPL

    ( Leading underlying strength of US Indices)

     AAPL W 10 23 2020

     Amazon $AMZN

    AMZN W 10 23 2020


    Commodities and Forex

     BDI Freight Index

     BDI W 10 23 2020


    Energy and Commodities

    US Crude Oil (WTI)

    In any break key is crowd behavior to help tell the story. We watch ABC corrections from here. he March breakdown, Support Tenkan and Kijun. In any break key is crowd behavior to help tell the story. We watch ABC corrections from here.
    WTI D 10 23 2020

    WTI after it’s huge run continues to rebalance chikou indicative of extreme crowd behavior in a series of fractals. We have completed 5 waves as marked, from here we watch 3 develop to confirm.

    These are special times, recall “After we regained the pattern 261.8% from the extreme (-$40) move. The climax of the larger acceleration lower after broke the weekly uptrend, a fractal of the sharp and all the way to all time lows to negative pricing we have seen mirror replications.” Support is previous channels, tenkan and Kijun. Above we have 50wma and Murrey Math time and price Above we have 50wma and Murrey Math time and price.  

     WTI W 10 23 2020

    US Natural Gas (Henry Hub)

    US Natural Gas continues to work the lows that were either (5) or (iii) of (5). After a b or ii down we have bounced over tenkan and Kijun into cloud. Key is that 3 wave low. Above top of cloud. So far consistent failed breaks despite the strength of spitting the previous low and -2/8 with an island reversal to test the Kijun and downtrend line but fell back to Tenkan The big question is was that a completed move down there or a 3? Support at cloud.

    NG D 10 23 2020 

    Natty continues in large sideways pattern between weekly kijun and tenkan as they suppress. Above Cloud and 50wma. Support is downward channel and previous low. Talking fractals, remember the tenkan/kijun kiss of death brought it down from the $2 range. Much work here churning away.

    .NG W 10 23 2020

       Precious Metals


    Gold (AUG) fell 0.11% to settle at $1,801.9 but gained 0.66% for the week kGold exudes strength after it back tested the previous wave 3 after finally cracked the Tenkan after correcting in 3 waves from 1556 to Murrey Math +3/8. In sight of the intraday high of $1765.43 reached on May 18. We have overcome the negative divergence between the weekly chikou, Silver spread and the recent highs. Support Tenkan & Kijun. From there does the 5 play out? Watch Fibs and chikou.

    Gold W 10 23 2020


    Silver  did a fractal of the sharp C up to breakdown level above the cloud fed by divergence from gold reverting. no  Silver reverseds with much more violent impulse than gold . Given that we have to repsect this is a iii  but  here is also a chance this is an A

     Silver W 10 23 2020

     Australian Dollar – AUDUSD

    Aussie dollar continues higher after it competed 5 waves in emotive  fashion. with vigor spitting the 100% panic muster. It has closed over the 50 Wma in 5 waves Resistance cloud is a long way off.  Support Tenkan and Kijun. From here we watch for 2 or X

    AUD W 10 23 2020

    New Zealand Dollar – NZDUSD

    The Kiwi mirrored the AUD and has closed over the panic breakdown (0%) correcting all of the panic muster wave. We are now above the Tenkan, which is pivotal. Resistance 50wma

    NZD W 10 23 2020

    Canadian Dollar – USDCAD

    The Loonie continues to correct in ABC after spitting the 261% Fib & Weekly 8/8 after 5 waves lower. We closed at the old 100% 61.8% confluence. Use Fib s for support and resisitance until Tenkan and Kijun catch up, 

    CAD W 10 23 2020

     Euro – EURUSD

    The Euro tested and held both the channel and cloud spits after so many false breaks to close at its best level since the BRexit spike. We are still in 3 waves so we need to see development for continuation. Resistance is Fibs as marked.  Watch for impulse off Chikou rebalance and Kijun above. Again governed by EURGBP and Bund volatility. 

    EUR W 10 23 2020

     EuroPound – EURGBP

    Back testing top of outer band and tenkan of Brexit. Johnson price reaction.after its classic ABC out of failure following the X wave. Tenkan will give us a clue if normalcy is returning to the channel trade.

    EURGBP W 10 23 2020

     Japanese Yen – USDJPY

    Japanese Yen still stuck in channel trade, a series of failures and sharp bounces after X led 3 wave panic. Any change will come from the weekly Kijun Tenkan kiss. Use your #USDJPY Murrey 6/8 0/8 grid for now. #EURJPY #AUDJPY will determine risk on/off

    JPY W 10 23 2020

     Mexican Peso USDMXN

    The Peso has been correcting in ABC since it collapsed and spat 261% right back to the 100% Fib  We have seen violent moves with outisde uncertainty from oil and COVID19. Use the Gann octave and the extension fibs to help measure the noise. 

    MXN W 10 23 2020

      Turkish Lire USDTRY

    USDTRY after completing the large 5 waves corrected back to the channel acceleration point and finished testing Tenkan. Alternative is we are still in Wave 5 and this is another 1- Kijun support well above cloud  Impulse is needed to pull away from here.  Keep an eye on geopolitical risk factors.

     TRY W 10 23 2020


    Nothing new for Bitcoin, more of the same as it continues to falter after 61.8% spit. Well under the tenkan and kijun. Needs to test downtrend for higher correction. Use your MM rules as algos control the herd here, support is the cloud – we said be wary of sharp ABC, 1-2 moves.

    BTC W 10 23 2020


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