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Cautious Markets as Dollar Lost Bid

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STATE OF THE MARKETS

Cautious markets as Dollar lost bid. The surge higher in US equities didn’t last the whole day, as Dollar lost bid and investors were seen flocking to safe-haven bonds as New York closed on Tuesday. More than $155 billion worth of block orders flowed into US bond futures, as Dow (+0.10%), S&P500 (+1.42%), and Nasdaq (+3.69%) recovered earlier losses. The benchmark US 10Y yields fell down sharply to close below 1.53% as safe-haven demand perked up.

Crude futures fell for two straight days, closed below $64.05/bl, as traders awaited report that may show US inventories build up as Texas refineries were shut down due to recent heavy snow storms. Gold rebounded sharply as more than $119 million worth of block orders hit the futures markets. The yellow metal closed higher, above $1,715/oz, as it hit the demand zone back in April to June last year.

In the FX space, Dollar lost bid in the short term as $1.9 trillion is about to hit the US economy in the next few weeks. Markets seemed cautious in the medium term as high beta Comdolls were running on the back foot, while safe-haven Swiss gained traction in demand. Euro overbid Sterling in the short-term, suggesting a reversal maybe around the corner for EUR/GBP.


G8 CURRENCIES SENTIMENTS

ST CHF AUD NZD EUR GBP JPY CAD USD ST
MT USD CAD GBP CHF EUR AUD JPY NZD MT
LT GBP CAD AUD USD NZD EUR JPY CHF LT
** ST refers to Short-Term which is daily turnover, MT is Medium Term which is weekly 
and LT refers to Long-Term which is monthly turnover.

WALL ST MOST ACTIVE

TICKER LAST PRICE

% CHANGE

VOLUME 90 DAYS AVG
XELA 4.61 + 179.39 474,952.4K 3,465.8K
SNDL 1.39 + 17.80 313,800.8K 483,755.1K
NIO 41.35 + 17.44 176,602.6K 154,217.4K
SQQQ 14.39 – 11.83 158,655.6K 75,033.5K
OGEN 1.25 + 47.97 140,021.5K 18,929.3K
AMC 10.50 + 13.02 150,415.6K 111,461.6K
AAPL 121.08 + 4.06 129,525.7K 110,136.9K
GE 14.00 – 1.20 114,467.7K 91,330.8K
EYES 15.48 + 31.52 107,190.9K 14,150.9K
SPY 387.17 + 1.43 113,633.6K 75,101.1K
** % Change here refer to price

WALL ST TOP FLOWS

TICKER LAST PRICE

VOLUME

% CHANGE FUNDS FLOW $
TSLA 673.58 67,523.3K + 78.63 45,482.3M
AAPL 121.08 129,525.7K + 14.08 15,683.0M
AMZN 3,062.85 4,030.0K + 12.53 12,343.3M
GME 246.90 39,099.3K + 1.73 9,653.6M
MSFT 233.78 33,080.5K + 14.83 7,733.6M
NIO 41.35 176,602.6K + 63.68 7,302.5M
NVDA 500.81 13,045.6K + 24.70 6,533.4M
FB 265.74 22,039.7K + 18.24 5,856.8M
BA 230.61 21,001.1K + 30.72 4,843.1M
DIS 194.51 23,331.0K + 56.82 4,538.1M
** % change here refers to volume

TOP 5 BLOCK ORDERS

SYMBOL PRICE/STRIKE TYPE VOL/OI FUNDS FLOW $
BOX 21.27/26.00 stock options/call 149.01 150.0M
SNOW 230.02/240.00 stock options/call 86.98 1,449.7M
GC 1,694.40 – 1,710.80 gold futures 700 119.5M
ZN/F 123.2150 – 132.0350 US bonds futures 12,260 155,317.2M
CL 53.30 – 64.95 crude oil futures 1,200 74.3M

OUR PICK – XAG/USD

Dollar weakness is temporary. We believe current Dollar weakness is temporary and market is repricing Dollar value as the new $1.9T stimulus took effects. With more than $29 billion USD shorts in the futures market, it’s the lowest bear bet since December last year. In other words, traders are repositioning themselves to cover the Dollar shorts and therefore the reduction of longs in gold, Yen and Euro. Silver was not spared either, as all non-interest bearing assets struggled to retain demand as investors flock to the yields bearing US bonds.

In the equities market, the last two days alone saw more than $240 million worth of equities were sold by insiders, compared to $57 million being bought. In other words almost 80% of insiders are cashing out than adding to their holdings, and this is alarming for just two days and the numbers were even higher last week. This base case, suggested a stronger Dollar in the months ahead, as markets almost fully priced in Dollar weakness in our opinion.

HORIZON STRATEGY SL TP1 TP2
Short-Term Buy @ 25.30 25.00 26.15 26.50
Medium-Term Sell @ 26.50 27.10 25.70 25.00
Long-Term Sell @ 26.50 27.10 24.20 22.50

Disclaimer:

This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.