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Stocks Rallied As Sentiments Improved

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STATE OF THE MARKETS

Stocks rallied as sentiments improved. US stocks rallied on Thursday as optimism returned post Fed’s dovish plan to taper and hike in late 2022. All indexes from Dow (+1.48%), Nasdaq (+1.04%) to S&P (+1.21%) and Russell (+1.82%) surged higher after reports from JP Morgan seeing S&P at 4,700 by year end and 5,000 next year. Yields on the 10Y benchmark surged to 144 basis points, the highest in 8 weeks, as Dollar (DXY) retreated to the 93 handle on early profit taking towards month end.

In the commodities market, crude continued its upward trajectory towards $73.50/bl as supply concerns remain towards winter and growing demand. Gold pulled back for the second day, closing below $1,750/oz, the first time in five months as fears subsided.

In the FX space, risk is definitely on as demand for Dollar receded across horizons, with Yen and Swiss on the offer sides, except for medium term accounts that remain cautious as Swiss seized the helm of demand. Other than that, comdolls are pretty much the order of the day.


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G8 CURRENCIES SENTIMENTS

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


WALL ST MOST ACTIVE

TICKER LAST PRICE

% CHANGE

VOLUME 90 DAYS AVG
CEI 1.90 + 30.14 259,505.3K 49,300.3K
RNAZ 4.02 + 53.44 225,830.4K 1,105.9K
RWLK 2.17 + 21.23 115,614.6K 4,661.9K
SQQQ 7.67 – 2.79 85,260.0K 79,040.9K
ATER 12.00 – 28.23 82,955.4K 13,567.9K
SPY 443.18 + 1.22 76,322.1K 64,493.9K
XLF 38.02 + 2.45 71,787.1K 49,654.4K
F 13.71 + 3.63 68,642.4K 74,287.2K
AAPL 146.83 + 0.67 64,788.0K 78,509.3K
PLTR 28.77 + 4.89 59,904.0K 47,534.3K
** % Change here refer to price


WALL ST TOP FLOWS

TICKER LAST PRICE

VOLUME

% CHANGE FUNDS FLOW $
AAPL 146.83 64,788.0K – 22.85 9,512.8M
TSLA 753.64 11,938.7K – 30.38 8,997.5M
AMZN 3,416.00 2,378.2K – 19.38 8,123.9M
FB 345.96 21,801.6K + 47.10 7,542.5M
NVDA 224.82 24,845.7K + 3.11 5,585.8M
MSFT 299.56 18,601.7K – 16.47 5,572.3M
MRNA 454.60 9,618.0K – 28.77 4,372.3M
CRM 277.86 15,613.6K + 133.25 4,338.4M
BABA 151.19 24,691.2K + 5.40 3,733.1M
AMD 106.15 32,803.1K – 20.22 3,482.0M
** % change here refers to volume


TOP 5 BLOCK ORDERS

SYMBOL PRICE / STRIKE TYPE VOL/OI FUNDS FLOW $
UAA 21.43 / 21.00 stock options/put 81.61 139.5M
QS 27.05 / 32.00 stock options/call 70.74 945.7M
BAC 41.69 / 41.50 stock options/put 63.83 2,075.3M
SNAP 79.37 / 81.00 stock options/call 43.43 1,662.4M
CL 71.70 – 73.15 crude oil futures 2,575 187.1M


OUR PICK – No New Pick

No new pick going into the weekend. What caught our attention this week was a steady flow of more than $2b/day to gold and silver ETFs (GLD, SLV, IAU) compared to a meager $800m/day to bullish Dollar funds (UUP). Though this is meager compared to almost $10b/day to short term money markets, it is still a trend to be reckoned with. It seemed that some part of the markets, as always, doubted Fed’s capacity to hike as the balance sheet had ballooned to more than $8tn now. Only time will tell.

Trades updates:  

Equities: Currently we are holding 8 stocks – 7 longs and 1 short – and have approached maximum equities exposure. We are long AUY (30% undervalued) with dividends yielding 2.94%, T (14% undervalued) at 7.70% yields and COG (14% undervalued) yielding 2.27%. CLVS is currently 22% 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 (42% 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).

FX & Commodities: We have closed all FX trades pre-FOMC to book profits for the month.

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HORIZON STRATEGY SL TP1 TP2
Short-Term
Medium-Term
Long-Term

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.