Are Negative Nuances Flushed? | Morning Express 05/13/22

Posted: May 13, 2022, 7:33 a.m.

Do not miss yesterday’s Midday Market Minute from after the bell.

- U.S. equity benchmarks held late afternoon lows for a change and mend has carried overnight.

- Fed Chair Powell spoke after the bell. His comments were not upbeat, but truthful, saying the Fed cannot guarantee a soft landing. He did shoot down the potential of a 75-bp hike in June or July.

- Global markets gained overnight, led by the Nikkei and Hang Seng.

- Light at the end of the tunnel for Shanghai lockdowns, but cases have risen in Beijing for each of last two days.

- China’s Loan and Financing growth for April plummets in dataset this morning.

- Samsung will raise the price of its semiconductors by 20%. See how chipmakers digest this today, they must be a leader.

- Musk puts Twitter deal “temporarily on hold”.

- U.S. Dollar Index has officially broken out.

- USDCNH sideways on day, but highest since September 2020

- U.S. 10-year yield slipped to a low of 2.81% yesterday, but inching higher this morning.

- VIX is at a 5-day low, check out yesterday’s Morning Express on why a VIX blowout is not necessary.

- VXN, Nasdaq volatility slipping after failed double top yesterday against January high.

- Fresh Michigan Consumer data for May is due at 9:00 am CT

- Minneapolis Fed President Kashkari speaks at 10:00 am CT, he is known to be dovish and his comments on at 2% neutral rate have been seen to buoy stocks. He is a voter in 2023.

- Cleveland Fed President Mester is a 2022 voter and speaks at 11:00 am CT. Her comments were less certain earlier in the week and highlighted the Fed’s challenges ahead, but reiterated 50-bp hikes.

E-mini S&P (June) / NQ (June)

S&P, yesterday’s close: Settled at 3927.25, down 3.00

NQ, yesterday’s close: Settled at 11,947.25, down 22.50

- The S&P made a new session low to come within 10 points of 3846, which is a 20% correction from highs, and the top end of our rare major four-star support.

- NQ made late session low by 4 points and held 50% retracement back to pandemic low.

- For a change, selling was abated late in the session and rally ensued, led by Tech.

- We are keeping a close eye on QQQ/XLP for a relative strength thrust to confirm follow through.

- S&P and NQ are trading out above yesterday morning’s early failed high, and this is a positive; continuing to do so will leave the bulls in the driver’s seat on the session.

- We will take a more Bullish view with the S&P and NQ holding out above major three-star supports at 3927.25-3930.25 and 11,947-11,991

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NQ (June)

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Crude Oil (June)

Yesterday’s close:  Settled at 106.13, up 0.42

- Strong and steady price action in Crude grinding back towards major 111.06-111.37 mark.

- Light at the end of the tunnel for Shanghai virus lockdowns helping underpin rally, aiming for mid-May.

- The stair climb on levels has worked terrific, look for major three-star support now at 104.80-105.08 to be line in sand holding renewed near-term uptrend.

- Bulls in driver’s seat on session and into next Tuesday’s option expiration as long as holding above 107.19-107.61.

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Gold (June) / Silver (July)

Gold, yesterday’s close: Settled at 1824.6, down 29.1

Silver, yesterday’s close: Settled at 20.773, down 0.802

Talked about stepping to sidelines on Midday Market Minute.

- Massive levels of support for both Gold and Silver have been violated.

- Downtrend is real as U.S. Dollar breaks out.

- Gold and Silver must hold next levels of support for any chance of a near-term rebound to begin repair, major three-star supports at 1800-1810 and 20.00

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Crude Oil (June)

Yesterday’s close:  Settled at 106.13, up 0.42

- Strong and steady price action in Crude grinding back towards major 111.06-111.37 mark.

- Light at the end of the tunnel for Shanghai virus lockdowns helping underpin rally, aiming for mid-May.

- The stair climb on levels has worked terrific, look for major three-star support now at 104.80-105.08 to be line in sand holding renewed near-term uptrend.

- Bulls in driver’s seat on session and into next Tuesday’s option expiration as long as holding above 107.19-107.61.

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