STATE OF THE MARKETS
Stocks on dead cat bounce ahead of FOMC. US stocks attempted to bounce back from Monday’s losses, with Dow (-0.15%), Nasdaq (+0.22%) and S&P (-0.08%) trying to rally three times, but finished mixed on Tuesday. Treasuries yields nudged higher as bond prices fell in anticipation of the Fed’s tapering statement on Wednesday. The 10Y benchmark closed at 1.33% as the Dollar Index closed around the 93.20 mark.
In the commodities market, crude was little changed on Tuesday but rebound to $71.25/bl at writing as traders expect EIA to report further reduction in US inventories. Gold continued it’s second day advance on risk aversion buying and settled around $1,774.25/oz as New York closed.
In the FX space, short term traders ditched Euro and Dollar in favor of Loonie and Sterling as speculation abound that Fed’s might change nothing in FOMC tomorrow. Sentiments in the medium to long term accounts were little changed. EIA energy reports and FOMC will be in the spotlight Wednesday.
G8 CURRENCIES SENTIMENTS
** ST refers to Short-Term daily turnover, MT is Medium Term weekly
and LT refers to Long-Term monthly turnover.
WALL ST MOST ACTIVE
|VOLUME||90 DAYS AVG|
** % Change here refer to price
WALL ST TOP FLOWS
|% CHANGE||FUNDS FLOW $|
** % change here refers to volume
TOP 5 BLOCK ORDERS
|SYMBOL||PRICE / STRIKE||TYPE||VOL/OI||FUNDS FLOW $|
|INDI||11.52 / 15.00||stock options/call||110.69||69.0M|
|LCID||26.81 / 28.00||stock options/call||84.36||3,007.7M|
|ZF/N/B-UB||123.1250 – 199.0200||US bond futures||28,172||382,397.9M|
|CL||59.41 – 70.00||crude oil futures||1,100||75.0M|
OUR PICK – No New Stock Pick
No new stock picks as we are at maximum equities exposure. Recent rout in the stock market bode well for our shorts in GE, although not so much in other longs. Currently we are holding 8 stocks – 7 longs and 1 short – and have approached maximum equities exposure. We are long AUY with dividends yielding 2.94%, T at 7.72% yields and COG yielding 2.32%.
CLVS is currently 21% overvalued with -7.19 z-score but trading central projects a rebound towards 5.62-5.87 where we will most likely close our positions.
We remain bullish with VIPS (43% undervalued with 5.59 z-score), GT (47% undervalued with 1.28 z-score) and CRON (16% undervalued with 9.18 z-score) while bearish GE (25% overvalued with 1.36 z-score). Feds may inspire rebound on Wednesday, but Monday’s volume signaled further downside before institutional investors step back in.
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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.