Traders Market Weekly: A Magical Green First Quarter for Stocks

March 31, 2024

FEAR NOT Brave Investors

Where have we been and where are we going? Join our weekly market thread on Traders Community…

AI Magic

AI, Jobs and Inflation

The Week That Was – What Lies Ahead?

Contents

Click on the links below to navigate to the relevant section.

Editorial

Another remarkable quarter with the S&P 500 building on a five-month winning streak, the last time this happened to end a first quarter was back in 2013. With the shift in the global interest-rate cycle, low yielding assets are out and everything with a smell of yield is in. The coming quarter has much to live up to! Our take remains the Fed is not just focused on inflation but risks such as the commercial real estate debacle. the high US dollar and the massive Federal debt refunding cost.

The S&P 500 booked another record high close on Thursday ahead of the Easter holiday weekend. For the week we saw some consolidation into Easter, locking in quarterly returns and ahead of a big week ahead with heavy Fed speak and the US jobs report. The Vanguard Mega Cap Growth ETF (MGK) fell 0.8%. The PHLX Semiconductor Index (SOX) fell 0.1% after news China will not allow chips from AMD (AMD) and Intel (INTC) to be used in government computers. The small cap Russell 2000 continued its recent outperformance and popped 2.5% this week.

The equal-weighted S&P 500 rose 1.6% this week. Only two S&P 500 sectors closed lower this week, communication services (-0.8%) and information technology (-1.3%). The top sectors were the utilities (+2.8%), real estate (+2.2%), and energy (+2.2%) sectors.

Core PCE Comes in Tamer but Spending a Worry

Bond and equity markets were closed on Friday for Good Friday, despite this the much loved, well be the Fed, Personal Income and Spending report for February was released Friday. The Fed’s preferred inflation gauge, the Core PCE Price Index. C ore personal consumption expenditures price index, which strips out the volatile food and energy components, rose 0.3% from the prior month, slowing from January’s surprisingly strong reading.

The data are in line with the view that while inflation has cooled, it remains stubbornly higher than the Federal Reserve would like, limiting the scope for interest rate cuts this year. At the same time, the numbers are reassuring strategists that the economy continues to hold up just fine after the Fed’s rate-hiking campaign of the past two years.

Fed Chair Jerome Powell said at an event at the San Francisco Fed after the data release, “It’s good to see something coming in in line with expectations”. “February is lower but it’s not as low as most of the good readings we got in the second half of last year; but it’s definitely more along the lines of what we want to see.”

One worry from Friday’s report was the mismatch between spending and income. While higher spending boosts the economy short-term, it’s unsustainable to spend more and make less. Real personal spending climbed 0.4% last month, above estimates for a 0.1% increase.

Quarterly Report

The quarter continued the short squeeze, followed by asset chasing that began last year as financial conditions loosened further, building on the Fed’s Q4 dovish pivot. The standouts of course were the AI inspired rally led by NVidia and the crypto rip which saw Bitcoin break to new highs. The spectacular risk asset melt-up was ongoing and global, with record highs in the US, Germany, France and Australia indices to name a few.

Stocks first quarter of 2024

  • S&P500 returned (price and dividends) 10.55% in the “best first quarter since 2019.”
  • Super Micro Computer led the gainers, surging 255%.
  • Nvidia jumped 82%, Micron Technology 38%, and Meta Platforms 37%.
  • Semiconductor Index (SOX) returned 17.76%,
  • Nasdaq Composite up 9.32%, Nasdaq100 8.72%.
  • NYSE Arca Oil Index returned 16.44%,
  • Nasdaq Insurance Index 15.39%,
  • NYSE Arca Computer Technology Index 15.01%,
  • Nasdaq Transports 11.61%,
  • NYSE TMT Index 10.55%.

From October 26th lows to March highs:

  • Semiconductors rallied 65%,
  • KBW Bank Index 47%,
  • NYSE Arca Computer Technology Index 39%,
  • Small cap Russell 2000 31%,
  • Nasdaq100 30%,
  • S&P500 28%.
  • Bitcoin ended the quarter up 159% from October lows, trading at a record high on March 14th ($73,798).

Five months ago, was when the beast was unleashed.

For the quarter, the S&P500 returned (price and dividends) 10.55% – the “best first quarter since 2019.” Super Micro Computer led the gainers, surging 255%. Nvidia jumped 82%, Micron Technology 38%, and Meta Platforms 37%. The Semiconductor Index (SOX) returned 17.76%, the Nasdaq Composite 9.32%, and the Nasdaq100 8.72%. The NYSE Arca Oil Index returned 16.44%, the Nasdaq Insurance Index 15.39%, the NYSE Arca Computer Technology Index 15.01%, the Nasdaq Transports 11.61%, and the NYSE TMT Index 10.55%.

“We have a market trying to interpret the Fed who is trying to find out how they can interpret their long-only portfolio at a risk parity where rates cannot rise.”– MoneyNeverSleeps

Reddit Fever

When speculation runs hot IPOs often do too and this week, we saw that. Social media platform Reddit (RDDT) began trading on the New York Stock Exchange Thursday. Shares closed at $45.94 on Friday, giving the company a market cap of $7.3 billion. On Wednesday night, the IPO priced at $34 per share, netting $748 million in proceeds. Back in 2021, Reddit raised $410 million at a valuation north of $10 billion.

Since the Fed’s December “dovish pivot”

  • S&P500 jumped 17.2%.
  • The Semiconductor Index surged 25.3%,
  • NYSE Arca Computer Technology Index 19.0%.
  • Nvidia has almost doubled at up 98%, with Meta up 52%, Micron 41%, and Netflix 36%.
  • Investment-grade spreads (to Treasuries) dropped from 1.04 to 0.88 – outside of a couple of months in 2021, the narrowest since March 2007 (20-year avg. 1.49).
  • High yield spreads collapsed from 3.63 to 2.92 – that, excluding the six months beginning in June 2021, are the narrowest since July 2007 (20-yr avg. 4.93).
  • “The tightest spreads on AA bonds since 2005” and “Single B Spread Index Makes New 16 year Low.”
  • Gold prices have rallied $185, or 9.4% to $2,165, trading this week to an all-time high $2,221.

We need to grasp all the risks to be wary of but not ignore price reaction. We always talk here about expect the unexpected and now that is front and center, gage the market’s reaction, the market is always right and that’s why we focus on the crowd psychology aspect.

Our weekly reminder for risk, timely given the V shape to ATH in just a week. The downside is clear with the absence of moral hazard from repeated Federal Reserve market bailouts in an environment of some would say obscene liquidity pumps. Pure greed is the other part, not wanting to miss out. The obvious question is, how deeply ingrained is this attitude through the markets? How do we ween the markets off this continuous dip feed? At this point the Central Banks have kicked that answer down the road.


PART A – Stock Markets

Highlights – USA

  • S&P500 increased 0.4% (up 10.2% y-t-d),
  • Dow gained 0.8% (up 5.6%).
  • S&P 400 Midcaps rose 1.8% (up 9.5%)
  • Small cap Russell 2000 jumped 2.5% (up 4.8%).
  • Nasdaq100 slipped 0.5% (up 8.5%).
  • Utilities jumped 2.9% (up 4.4%).
  • Banks surged 3.1% (up 9.2%),
  • Broker/Dealers added 1.9% (up 10.1%).
  • Transports advanced 1.3% (up 2.0%).
  • Semiconductors were little changed (up 17.5%).
  • Biotechs increased 0.3% (down 2.5%).
  • With bullion jumping $64, the HUI gold index surged 7.2% (up 1.6%).
Major US Stock Indices

Highlights – Europe Stocks

  • U.K.’s FTSE equities index increased 0.3% (up 2.8% y-t-d).
  • France’s CAC40 gained 0.7% (up 8.8%).
  • German DAX equities index rose 1.6% (up 10.4%).
  • Spain’s IBEX 35 equities index advanced 1.2% (up 9.6%).
  • Italy’s FTSE MIB index added 1.2% (up 14.5%).

 Highlights – Asia Stocks

  • Japan’s Nikkei Equities Index declined 1.3% (up 20.6% y-t-d).
  • South Korea’s Kospi index was little changed (up 3.4%).
  • India’s Sensex equities index rose 1.1% (up 2.0%).
  • China’s Shanghai Exchange Index slipped 0.2% (up 2.2%).

 Highlights – Australian Stocks

  • Australia’s ASX All Ordinaries: Thursday +1% to 7896.9 (+2.6% for the week).
  • Record intraday of 7901.2 points, beating its March 8 record of 7853.1 points
  • Record closing high topped previous record close of 7847 on March 8.
  • Up 3.9% this year, an extension of a 7.8 per cent rally in 2023.

 Highlights – Emerging Markets Stocks 

  • Brazil’s Bovespa index increased 0.8% (down 4.5%),
  • Mexico’s Bolsa index gained 1.4% (unchanged).
  • Turkey’s Borsa Istanbul National 100 index added 0.3% (up 22.4%).
  • Russia’s MICEX equities index gained 1.8% (up 7.5%).

Biggest SPX Stock Winners and Losers Last Week


Technical Analysis 

Technical Analysis of key markets via KnovaWave

S&P 500

Daily: We saw a violent ABC for the 5 waves up for SPX continue right into bottom of the median line to give us an (a) or C of a 4. with impulse after completing 5. Reversed hard with energy fueled from the power impulse down from near +1/8 ATH. On the way up (just like down) It accelerated after it broke the Tenkan through the rejected Kijun and then the Kijun to close back over the median and 8/8. Bulls this was a (ii) of a 5. Bears this is a a-b of a C off a completive V of degree. We watch if this low was a (iii), (a) or C. Will determine if sharp ABC completed off all time highs around +1/8. We have to respect the number of alternatives of degree of 5. With such trends keep it simple support is Tenkan and Kijun and watch for ABC. No fear is the driving element.

Daily S&P 500 Flat Top Triangle

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

Weekly: The weekly shows us the reenergized SPX tripped in 3 to test recent break up at Tenkan from there we had had a powerful rally to ATH. Again notice what happened “Each new high has evolved after testing Tenkan key support which is the next line after Friday’s dump & minor bounce.” We watch for a spit of a spit Extensions are difficult to time, keep it simple.

S&P500 Weekly Outlook

Key for the impulse higher was the spit or retest of MM 8/8 and Tenkan San, which held with the previous highs and Tenkan.  To repeat  “We look for 3 waves down and reactions to keep it simple with the alternatives in the daily.”  Keep an eye on the put/call 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 Chikou rebalances

Dow Jones

DJIA Weekly

NASDAQ 100

Nasdaq move to ATH was after it broke and held the weekly Tenkan to see a spit of a spit fail which is completive of 5 of some degree with Chikou rebalancing. From there we sold off right to Tenkan (as did SPX) and bounced hard Support Tenkan to Kijun. Watch Chikou for divergence for continuation or failure. Divergence with Russell also a clue.

NASDAQ Record Highs

Russell 2000

The small cap Russell RUT has been developing a large flag which it did a false break to fuel the selling from there we replicated to the down (Adam’s theory). Unlike SPX and NDX we could not get through Tenkan and Kijun which rejected the bounce. This is the index showing more of the fast money crowd and is trading like it. Closed right at the top of the cloud and at the channel. the flag. Needs to get traction in here for bulls. Support +1/8 through 7/8 (cloud base)

Russell Index Negative Divergence to NASDAQ

US Stocks Watch

Investors (and algos) will focus on the conference calls and outlooks. Last quarter everyone expected the worse, we saw critical updates on production in coronavirus impacted regions and if there is extended halting of operations weighing on multi-nationals. 

Microsoft MSFT

VanEck Vectors Semiconductors ETF

NVidia $NVDA

Following the announcement of NVDA 4/1 split some levels off the energy break NVidia hasn’t looked back with many gaps below. We saw another power move off the $200 retest (old $800) & earnings off $300 which are retesting. It is a clear leader of #SOX #SMH look for cues there and ABC failures for changes.

Nvidia NVDA stock chart

Apple $AAPL

Apple gently motored up to new ATH over the massive $160 then $170 thru to $180 gamma level. These levels will be key energy levels. Support from previous highs, resistance now Fibs and Murrey Math levels. Remember the impact $AAPL has, at least short term on all the major indices.

Apple AAPL Stock Chart

Meta $META

Exxon Mobil $XOM

Exxon Stock Chart

Part B: Bond Markets

First Quarter Highlights

  • 10-year Treasury yields jumped 32 bps during Q1 to 4.20%, but corporate Credit notably outperformed.
  • Investment-grade spreads to Treasuries traded down to 88 bps late in the quarter, the narrowest risk premium since November 2021& and within seven bps of the low back to 2005.
  • High yield spreads dropped to 2.92 percentage points, the narrowest since January 2022.
  • Corporate debt issuance was nothing short of breth taking. “The primary US investment-grade corporate bond market logged its busiest first quarter on record, super-charged by investors clamoring for high yields before the Federal Reserve starts cutting interest rates. Blue-chip firms have capitalized on robust investor demand to borrow a record $529.5 billion this year through Wednesday, far outpacing the previous high of $479 billion in the first three months of 2020… Sales hit a record in January and February and March issuance of $142.2 billion has exceeded expectations.” March 28 – Bloomberg (Caleb Mutua)

Highlights – Treasuries

  • Total money market fund assets declined $5.7bn to $6.041 TN. Money funds were up $909 billion, or 17.7%, y-o-y.
  • Total Commercial Paper jumped another $21.2bn to a 15-year high $1.350 TN. CP was up $213bn, or 18.7%, over the past year.
  • 2-yr: +5 bps to 4.62% (+2 bps for the week; -2 bps in March)
  • 3-yr: +5 bps to 4.41% (+4 bps for the week; -3 bps in March)
  • 5-yr: +3 bps to 4.22% (+2 bps for the week; -4 bps in March)
  • 10-yr: +1 bp to 4.20% (-2 bps for the week; -5 bps in March)
  • 30-yr: -1 bp to 4.35% (-4 bps for the week; -3 bps in March)

“The primary US investment-grade corporate bond market logged its busiest first quarter on record, super-charged by investors clamoring for high yields before the Federal Reserve starts cutting interest rates. Blue-chip firms have capitalized on robust investor demand to borrow a record $529.5 billion this year through Wednesday, far outpacing the previous high of $479 billion in the first three months of 2020… Sales hit a record in January and February and March issuance of $142.2 billion has exceeded expectations.”

March 28 – Bloomberg (Caleb Mutua)

All good while markets hold up but take note that the loosest financial conditions in history have supported record 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 fueled a booming MBS market and record low mortgage rates pushing strong housing markets into Bubble risk territory. What we are seeing now is the same risk, on steroids is in the commercial real estate market (CRE).

Fed Total Assets

Highlights – Mortgage Market

  • Freddie Mac 30-year fixed mortgage rates declined eight bps to 6.79% (up 55bps y-o-y).
  • Fifteen-year rates fell 10 bps to 6.11% (up 56bps).
  • Bankrate’s survey of jumbo mortgage borrowing costs had 30-year fixed rates up 12 bps to 7.31% (up 37bps).

Highlights – Federal Reserve

  • Federal Reserve Credit declined $30.8bn last week to $7.463 TN.
  • Fed Credit was down $1.427 TN from the June 22nd, 2022, peak.
  • Over the past 237 weeks, Fed Credit expanded $3.736 TN, or 100%.
  • Fed Credit inflated $4.652 TN, or 165%, over the past 594 weeks.
  • Fed holdings for foreign owners of Treasury, Agency Debt declined $8.6bn last week to an 11-month low $3.341 TN.
  • “Custody holdings” were up $46.8 billion y-o-y, or 1.4%.

We do know we have massive speculation pockets, viz a viz the Semi stocks and cryptocurrency mania in just the matter of weeks. The Fed is effectively throwing additional fuel on historic speculative manias. Central banks have been adding liquidity to avoid systematic failure.

Highlights – European Bonds

  • Italian yields rose four bps to 3.68% (down 2bps y-t-d).
  • Greek 10-year yields increased a basis point to 3.38% (up 32bps). Spain’s 10-year yields were unchanged at 3.16% (up 17bps).
  • German bund yields declined two bps to 2.30% (up 27bps).
  • French yields increased one basis point to 2.81% (up 25bps).
  • The French to German 10-year bond spread widened three to 51 bps.
  • U.K. 10-year gilt yields were unchanged at 3.93% (up 40bps).

Highlights – Asian Bonds

  • Japanese 10-year “JGB” yields dipped one basis point to 0.73% (up 11bps y-t-d).

Part C: Commodities

Q1 24 Highlights

Despite face of dollar strength, commodities held their own (sans natural gas!)

  • Crude jumped 16%, with WTI ending the quarter ($83.17) within striking distance of two-year highs.
  • Unleaded Gasoline futures surged 29%,
  • Natural Gas sank 30%.

Outside of energy, the precious metals were the stellar performer in the commodities arena.

  • Gold surged $167, or 8.1%, to an all-time high $2,230.
  • Silver jumped 4.9% to $24.96.
  • WSJ: “What’s Next for Gold? Look to China for Clues.”
  • Bloomberg: “China Splurges on Gold for a 16th Month as Price Hits Record,” and “Gold Beans All the Rage With China’s Gen Z as Deflation Bites.”

“Commodities will advance this year as central banks in the US and Europe move to reduce interest rates, helping to support industrial and consumer demand, according to Goldman Sachs… Raw materials may return 15% over 2024 as borrowing costs come down, manufacturing recovers, and geopolitical risks persist, analysts including Samantha Dart and Daan Struyven said…. Copper, aluminum, gold and oil products may climb, according to the bank, which also stressed the need for investors to be selective as gains wouldn’t be universal.”

March 25 – Bloomberg (Yongchang Chin)

Highlights

  • The Bloomberg Commodities Index increased 0.8% (up 0.9% y-t-d).
  • Spot Gold jumped 3.0% to $2,230 (up 8.1%).
  • Silver advanced 1.2% to $24.96 (up 4.9%).
  • WTI crude jumped $2.54, or 3.2%, to $83.17 (up 16%).
  • Gasoline slipped 0.7% (up 29%),
  • Natural Gas rallied 6.3% to $1.76 (down 30%).
  • Copper was unchanged (up 3%).
  • Wheat rose 1.0% (down 11%),
  • Corn increased 0.6% (down 6%).
  • Bitcoin jumped $6,348, or 10%, to $69,700 (up 64%).

BDI Freight Index

  • The Baltic Exchange Dry Index dropped by 44 points, or 2%, to 2,196 on Friday, extending losses for a fourth day to a fresh low since March 6th. On the week, the BDI dropped 7.8%, after six straight weeks of gains.
  • The capesize index plummeted by 106 points, or 3%, to 3,482. Average daily rates for capesize vessels decreased by $877 to $28,875.
  • The panamax index fell by 39 points or 1.8% to 2,165. Average daily rates for panamax vessels fell $315 at $19,483
  • The supramax index saw a slight increase of 4 points, 1,383. On the week, the Baltic index dropped 7.8%, after six straight weeks of gains. Source: Baltic Exchange
Baltic Dry Index Weekly

Copper

Copper rebounded sharply off the 50wma pulled up by the flattening Tenkan and Kijun to close right at the channel break – a key juncture. #HG shrugged off demand concerns from resurgence in Covid-19 supply disruptions. The power spits of +8/8 and +2/8 were rebalanced by the Tenkan breaking the Kijun with 50wma and cloud below. Copper had been a leader in the risk on movement for commodities.

Copper Futures Outlook

Gold

Precious metals were the stellar performer in the commodities arena in Q1. Gold surged $167, or 8.1%, to an all-time high $2,230. Silver jumped 4.9% to $24.96.

WSJ: “What’s Next for Gold? Look to China for Clues.” Bloomberg: “China Splurges on Gold for a 16th Month as Price Hits Record,” and “Gold Beans All the Rage with China’s Gen Z as Deflation Bites.” – Watch for impulse

Gold Weekly Outlook

Energy

US Crude Oil (WTI)

Daily: WTI Crude Oil has continued to rally since retesting the pennant breakout last December after completing the correction in 3 waves. From there it broke the pennant and retested to continue to retest the breakdown last October to break above those descending levels for higher. We are in a completive mode for bulls with this impulse, it’s a question of degree on the topside, use the Murrey math 240/60 grid. Completing a C or IV? Support is previous lows and the bull flag. The bear case is the high was a complete 5.

WTI Daily KnovaWave

Weekly: WTI crude oil futures held the support line from July 2021, having plunged around 50% off 2022 highs. It has broken to the topside of its sphere of influence to close out the quarter over Kijun and Tenkan which are now support. WTI completed 3 waves and powered through the tenkan and 50wma, h and held the retest. Risk support is the grid. Resistance weekly channel, Murrey Math levels and previous breaks (off monthly). Bear case is Wave 5 complete.

What we broke……. Crude Oil in the past quarter built a huge bull flag. We watch if the recent break was false, or we fail. Very clear pattern.

WTI Weekly KnovaWave Shape

The key is crowd behavior to help tell the story which in energy is often around geopolitics. A great example of why we watch ABC corrections and from here we get the energy from the break being balanced. This move that was powered by 50 dma Tenkan spit of a spit – hence the fractal energies reverberations.

US Natural Gas (Henry Hub)

Daily: US Natural Gas futures are a great example of rebalancing mania. The market is still correcting the manic 5 post the Ukraine invasion. Since the breakdown of the correction channel with failed breakups we have continued to multi year lows in a pennant formation after holding the daily 1/8. We now look at our Adam’s theory fractal rules with fractal spits powering these moves lower. Two clear alternatives, we are correcting the highs 5 or that was a 3 and we go higher. Resistance is heavy: 2/8 and cloud above. Kijun, 50 dma and cloud. Support is previous lows. Important to watch how this energy was built for shape correlation.

US Natural Gas KnovaWave Daily Grid

Like the larger wave on the way up it accelerated through previous highs (flat topped triangle energy) and over the resistance at 8/8 and new highs. We successfully tested that break in a pennant ABC. Previous highs (flat topped triangle energy) and 8/8 and new highs underscore the structure that fed the move and is key longer term.

Weekly: Natural gas still correcting the past month when blew through all levels of support after breaking the weekly 50wma and the Kijun gave a kiss of death. From there we Broke down out of the corrective channel (Wave 4 or IV) to new multi-year lows. This week we closed right at the weekly Kijun and 1/8. around the 50wma and tenkan in the cloud. The instability stems from the sharp reversals that have failed indicative of speculative fervor like the previous impulsive spikes. Support is the 1/8 Sphere. Bulls need all the damage down to be rebuilt. Kijun is major resistance given energy higher came from a clean break of the Kijun.

US Natural Gas KnovaWave Weekly Grid

Part D: Forex Markets

John Maynard Keynes, 1920: “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction and does it in a manner which not one man in a million is able to diagnose.”

Highlights

In the first quarter the dollar is riding high against almost every major currency. We saw central banks, from Japan, China and India intervene, or consider intervening, to bolster their currencies. The yen in view of USDJPY 152 and the yuan struggling to break back below 7.2 USDCNH officials have stepped up efforts to stem any further depreciation.

In Japan it’s been verbal warnings, in China it has been state banks buying yuan and selling dollars.
Remember these two are major competitors for export dollars. With that there’s a school of thought that Beijing could have grown more tolerant of a weak yuan to maintain its competitive edge against the yen.

  • For the week the U.S. Dollar Index little changed at 104.51 (up 3.1% y-t-d).
  • On the upside, the Mexican peso increased 1.2%, the South African rand 0.8%, the Canadian dollar 0.5%, the British pound 0.2%, and the Australian dollar 0.1%. The Chinese (onshore) renminbi increased 0.09% versus the dollar (down 1.69% y-t-d).
  • On the downside, the Swedish krona declined 0.9%, the South Korean won 0.7%, the Norwegian krone 0.7%, the Swiss franc 0.4%, the Brazilian real 0.3%, the New Zealand dollar 0.2%, the euro 0.2%, and the Singapore dollar 0.1%.

 Australian Dollar – AUDUSD

The Aussie dollar is still correcting since completing a 5 at the pysch 80 level to fall under the weekly cloud in emotive fashion. The Australian dollar fell to test of the August lows of 0.7106 with Omicron fears. Should that double bottom go support ia the Murrey Math Levels. Resistance the Cloud, Tenkan and Kijun like many commodities.

Australian Dollar KnovaWave Weekly Outlook

Japanese Yen – USDJPY

USDJPY broke above after weakness with Treasury yields to rush to +2/8 and channel convergence, we have come a long way from that 108.00 massive support for dollar-yen back to test the top of the flat-topped triangle at 151/152. Any change will come from the weekly Kijun. Use your USDJPY Murrey 7/8 8/8 grid for now. EURJPY AUDJPY will determine risk on/off.

Japanese Yen v Dollar KnovaWave Weekly Outlook

Chinese Yuan – USDCNH

Canadian Dollar – USDCAD

The Loonie is holding the Tenkan after a 3 year high in June and corrected that in 3 waves led by the AUD and NZD with oil price impacting direction. Watch flat Kijun and Tenkan at 8/8. Use Fibs for support and resistance.

Canadian Dollar KnovaWave Weekly Outlook

Euro – EURUSD

Euro continues to bump up against that downtrend line from 2020 and spinning around the 50% of that year’s panic sell. The euro trades in what seems like eternal flags in the channel. We watch if Kijun (pink) testing Tenkan (orange) creates any impulse as EURUSD consolidates at the cloud. Watch 3 waves to see development for continuation. Watch for impulse off Chikou rebalance. Again governed by EURGBP and Bund volatility.  

Euro KnovaWave Weekly Outlook

British Pound – USDGBP

British pound classic retest of daily cloud break with magnet pulls of cloud twist after ABC correction – will need Tenkan to break through Kijun for more strength. The upcoming month will be heavy on UK data and election speculation which could mean an eventful time for the British pound.

British Pound KnovaWave Weekly Outlook

Bitcoin

Crypto Q1 24 Highlights

  • Bitcoin surged 64% during the quarter,
  • Ethereum gained 53%
  • Binance Coin soared 95%.
  • Having started trading on January 11th, the iShares Bitcoin ETF rose 52%.

Bitcoin is performing technically to perfection. Impulse begets impulse. To understand panic, understand greed. Bitcoin exploded higher following its correction impulsively upon completing 5 waves up at +2/8. Each Tenkan and Kijun tap saw an explosive kiss of death until we completed 3 waves to around 28,000. From there we have seen extreme volatility to a new record high and retest.

Bitcoin KnovaWave Weekly Outlook

We have seen what you would expect from a 5-wave impulse peak and ABC correction, a violent correction and completion. Use Murrey Math levels for corrections and targets as algorithms control the herd here, support is the cloud and sharp ABC, 1-2 moves. From there prices agitated towards those ATHs as news of a Bitcoin ETF fueled the rally, sound familiar? But this time it wasn’t signaling we are in a 3 high probability but a 5.

On the Risk Radar

Akio Morita mistakes

 Geopolitical Tinderbox Radar

The Week Ahead – Have a Trading Plan

Watch EarningsCentral Bankers and Geopolitics speeches, reports and rate moves. 

In the week ahead, we get Good Friday holiday-shortened trading week as we end a strong first quarter of the year. Highlights include more Fed speak post FOMC, PCE, and GameStop earnings.

US Economic Highlights

The week’s key highlight comes Friday morning with financial markets closed for Good Friday when the February Personal Consumption Expenditures (PCE) price index is released. This report contains “core” PCE inflation, the Fed’s preferred measure. Economists expect “core” PCE inflation rose 0.3% over the prior month in February and 2.8% over the prior year. The Fed, you’ll recall, targets 2% inflation.

  • Monday: February Construction Spending (prior -0.2%) and March ISM Manufacturing Index (prior 47.8%) at 10:00 ET
  • Tuesday: February Factory Orders (prior -3.6%) at 10:00 ET
  • Wednesday: Weekly MBA Mortgage Index (prior -0.7%) at 7:00 ET; March ADP Employment Change (prior 140,000) at 8:15 ET: and weekly crude oil inventories (prior +3.17 mln) at 10:30 ET
  • Thursday: Weekly Initial Claims (prior 210,000), Continuing Claims (prior 1.819 mln), and February Trade Balance (prior -$67.4 bln) at 8:30 ET; and weekly natural gas inventories (prior -36 bcf) at 10:30 ET
  • Friday: March Nonfarm Payrolls (prior 275,000), Nonfarm Private Payrolls (prior 223,000), Average Hourly Earnings (prior 0.1%), Unemployment Rate (prior 3.9%), and Average Workweek (prior 34.3) at 8:30 ET; and February Consumer Credit (prior $19.5 bln) at 15:00 ET

Bond market Highlights

  • Monday: 
  • Tuesday: 
  • Wednesday: 
  • Thursday: 

Central Bank Highlights

Two central banks with decisions this week, heavy Fed-speak is on tap. Four central banks will deliver meeting minutes.

  • Fed-speak: Chair Powell speaks on Wednesday at a Stanford University event, but the topic is unknown. A wave of regional Fed Presidents will speak throughout the week.
  • Banco Central de Chile expected to cut its overnight rate by 100bps for a second time in a row on Tuesday. However, there’s a high uncertainty over the magnitude of the rate cut after the recent headline inflation print for February which showed inflation up at 4.5% y/y from 3.8% in January.
  • The RBI is expected to hold its repo rate at 6.50% on Friday for a seventh consecutive meeting. At its last meeting, RBI Governor Shaktikanta Das reaffirmed the bank’s commitment to bring down inflation to 4% in a timely and sustainable manner. Headline CPI has been within the RBI’s target range of 2–6% since September 2023 but is still hovering around the 5% level due to rising food prices.
  • Meeting minutes from, Colombia’s BanRep on Monday followed by the RBA and then the ECB and Banxico on Thursday.

US Earnings Highlights

  • Monday starts us off with PVH (PVH).
  • Tuesday includes Cal-Maine Foods (CALM), Paychex (PAYX), and Dave & Buster’s (PLAY).
  • Wednesday Includes Acuity Brands (AYI), Levi Strauss (LEVI), BlackBerry (BB), and Sportsman’s Warehouse (SPWH).
  • Thursday includes Lamb Weston (LW), Lindsay (LNN), and Conagra Brands (CAG).
  • Friday Markets includes Greenbrier (GBX)

US IPO Week Ahead

The April IPO marketing is starting off with a fairly quiet calendar, with two IPOs are tentatively scheduled for the week ahead.

  • Brain cancer biotech NeOnc Technologies Holdings (NTHI) may raise $75 million at a $315 million market cap. Its most advanced candidate, NEO100, is a purified form of perillyl acid which is administered to brain cancer patients via intranasal delivery.
  • Holdover Mobile-health Network Solutions (MNDR) may raise $10 million at a $153 million market cap. Singapore-based telehealth company provides services through its MaNaDr platform, where users throughout the APAC region can access a range of telehealth solutions, comprising teleconsultation services and personalized services.
  • Two larger recent filers lead the potential calendar additions: skilled nursing care provider PACS Group (PACS) and neuro and inflammation biotech Contineum Therapeutics (CTNM).
  • A few other sizable IPOs in the pipeline have provided updates in the past month, including hospital billing platform Waystar (WAY), Chinese luxury EV brand ZEEKR (ZK), air transportation services provider PHI Group (ROTR), car sharing platform Turo (TURO), and product assessment services provider UL Solutions (ULS).

Focus on yourself and what YOU CAN INFLUENCE, set your trading plan and goals in be set for 2024. One suspects it will be a yearlong Groundhog Day for Biden, Trump, the GOP and the Democrats.  Throw on top of that Russia/Ukraine Israel/Gaza and China/Taiwan.

Trade Smart!

Watch Central Banker and Geopolitics Watch speeches, reports and rate moves

-comment section below data-

Real Time Economic Calendar provided by Investing.com.

Real Time Economic Calendar provided by Investing.com.

Subscribe and Follow

Find us at www.traderscommunity.com

Follow our contributors on Twitter @traderscom @thepitboss16 @knovawave @ClemsnideClem

Note these charts, opinons news and estimates and times are subject to change and for indication only. Trade and invest at your own risk.

Trade Smart!