2022/10/27 (098) Technical Analysis – NYSE-AXP & CBOT

I`m Not Superstitious But I Truly Believe In It:
Let It Go, As Long It Is Still Good, As Long, As It Is…
That`s Why We Remain Neutral On The Long Side This Week As Well!

Old School Is Leading The Ways On WallStreet – Meta Weighs On Nasdaq

The US stock exchanges presented themselves in two minds on Thursday. While very negatively received news from the Facebook and Instagram group Meta weighed on technology stocks, “old economy” companies and Dow heavyweights such as Caterpillar , McDonald’s , Merck & Co and Honeywell ensured a friendly mood among standard stocks.The leading index Dow Jones Industrial rose by 0.61 percent to 32,033.28 points, it was the fifth trading day in a row with price gains. The tech-heavy Nasdaq 100, on the other hand, slipped 1.88 percent to 11,191.63 points. The market-wide S&P 500 lost 0.61 percent to 3807.30 points.

So the hangover mood once again prevailed on the Nasdaq. Because the stocks, which have long been known for their strong growth, are showing more and more weaknesses. The day before, three heavyweights – Microsoft, Google’s mother Alphabet and chip manufacturer Texas Instruments – had already disappointed with their quarterly reports and forecasts. Meta, another industry giant, has now joined them. After the quarterly figures, the meta price collapsed by almost a quarter to its lowest level since 2016. Within a little more than a year, the price has almost quartered.

At Meta, the decline in sales accelerated in the last quarter. The company is suffering from the frugality of its advertisers, who are spending less money on online ads in the face of high inflation and economic concerns. At the same time, costs are rising, and the development of virtual metaverse worlds continues to devour billions – with unclear prospects of success. The bottom line is that profits fell by more than half. For the current quarter, the company forecast a drop in revenue of up to ten percent. This was offset by strong quarterly reports and forecasts from McDonald’s and Caterpillar on Thursday. The restaurant chain and the construction machinery and commercial vehicle manufacturer exceeded market expectations. Caterpillar topped the Dow with a premium of nearly 8 percent. McDonald’s gained more than three percent, with analysts praising a crisis-proof business model. Merck & Co gained 1.4 percent. Thanks to good business with the most important drugs, the pharmaceutical manufacturer raised its annual targets for the second time within three months. The papers of the conglomerate Honeywell rose by a good three percent. The company has gotten a little more upbeat about earnings this year.

DXY Rebounds And/Or US 10-Year Treasury Yield Retreats After GDP

The dollar index regained ground to trade above 110 on Thursday, recovering from its lowest level in over a month, after data showed the US economy remains resilient despite rising interest rates. The US economy grew an annualized 2.6% on quarter in the three months to September of 2022, more than market expectations of 2.4% and rebounding from a contraction in the first half of the year. The data comes against growing expectations that the Federal Reserve could pivot in December to prevent overtightening, after hiking rates for the fourth time by 75 bps in November. Elsewhere, the ECB delivered a second 75 bps rate hike as expected, and signaled more increases.

The yield on the US 10-year Treasury note fell to the below the 4% mark, extending its retreat from the over 14-year high of 4.3% touched on October 24 as investors digested fresh GDP figures and their impact on the Federal Reserve’s guidance. The US economy expanded by 2.6% on a quarterly basis in Q3, surpassing estimates of a 2.4% growth. Still, increasing hopes of a dovish pivot by the Federal Reserve maintained the downward pressure in Treasury yields. The US central bank is expected to increase its funds rate by 75bps in its November meeting, but reports that policymakers are starting to consider overtightening risks ramped up bets that the December rate hike could be at a slower 50bps.

The Fight For 30,000 Points In Rhe Dow Jones Stock Market, The Holding Of The 110 Points In The USD Index,
And Or The Meanwhile 4% In The 10year US Yields – That’s Seems What Determines The Price Action At The Moment! Or?

As I put it this week, in the 4 SetUps Technical Analysis, in the headline “I`m Not Superstitious But I Truly Believe In It: Let It Go, As Long It Is Still Good, As Long, As It Is… That`s Why We Remain Neutral On The Long Side This Week As Well!” And the current development also proves us right at the moment, with our neutral attitude. Even if it is admittedly highly speculative – and in the worst case, when we switch from the bull camp to the bear camp, and/or from the bear camp to the bull camp, in retrospect we only find ourselves with too many loss-making transactions!? But which strategy & tactic is perfect?! Therefore, we remain disciplined – and think, from day to day, from week to week, maximum, in these highly volatile times, as far as pice action is concerned.

It goes back and forth in the US stock market. The numbers are not great – and in the historical context, there are no reasons to enter the stock market in the medium term, let alone in the long term! However, as short-term speculative trader, as like in our 4XSetUps Trading Capability very much so, it`s a great trading market! Because in the last few weeks and months, apart from during the lockdown, due to the corona virus outbreak, has the mood regarding US Wall Street been worse? I don’t think so – but it’s not about the mood in New York, but rather about the emotional bullish/bearish reaction of the market participants, i.e. allof us who deal (in)directly with WallStreet. And our future expectations. And that all in an economic environment of the highest stagflation since the end of the Cold War, they are as bad as they have been for 40 years (the 1980s, to be precise). That´s why stay cautious about the US stock market! And only get in and out with a long tactic, short tactic, and/or short/long tactic – in these historically very volatile price action times…

US Tech Shares Plummet On Meta Weakness, Dow Outperforms

The blue-chip Dow pushed about 170 points higher on Thursday, outperforming the S&P 500 and Nasdaq as investors digested better-than-expected US GDP data and a slew of upbeat results for its components. The first estimate of third-quarter GDP showed that the economy grew by 2.6%, above market expectations of 2.4%, and returning to growth after two consecutive quarters of decline. On the corporate side, Caterpillar surged more than 7% after the heavy-equipment maker topped Wall Street projections for revenue and profit. Comcast and Mcdonald’s added 1.2% and 3.4%, respectively, following earnings reports that surpassed forecasts. On the other hand, the Nasdaq fell nearly 2.0% and S&P 500 0.6% on disappointing earnings from big tech. Facebook-parent Meta sank almost 25%! A Desaster, no quest about it…