Opening Bell: U.S. Futures, European Stocks Struggle; Volatility, Oil Rise

  • No news to counter yesterday’s bullishness, but futures and Euro stocks are retreating
  • Fear gauge climbed yesterday, even amid US rally

Key Events

US futures, including the , , and retreated early on Tuesday but the Dow and NASDAQ have now moved into positive territory. European stocks are also trading lower after a higher open.

On Monday, during the New York session, the , and closed higher by 1.7%, 1.8% and 2.25% respectively as political uncertainty dissipated on the news that President Donald Trump to the White House after being hospitalized over the weekend to receive treatment for coronavirus.

Gold and the dollar are lower this morning. Oil is up another 1% after Monday’s surge.

Global Financial Affairs

Currently, contracts on the S&P are testing afterhour lows.

S&P 500 Futures Hourly

The US500 hourly price fell below its uptrend since Friday’s lows.

The Index opened 0.25% higher as markets were focused on new hopes for a fresh stimulus package in the US, after Congressional House Speaker, Nancy Pelosi said that were progressing. It remains unclear whether the increased likelihood of a Democratic win in the Nov. 3 elections is impacting the market.

However, within 20 minutes of trading, the advance flipped negative and has been steadily falling since, developing, thus far, a bearish piercing pattern—if it closes at these levels—digging into most of yesterday’s candle.

If the price continues to slide till it envelopes yesterday’s candle in its entirety, it will have developed a Bullish Engulfing pattern, revealing an even more powerful bearish presence at these price levels.

Stoxx Daily

Stoxx Daily

The pan-European index may be developing a rising flag, bearish after the top—whether a blown out ascending triangle or upsloping H&S pattern. The fact that all three major moving averages are meeting demonstrates the importance of this event, setting up for an explosive move to end the secondary, smaller range.

Asia managed to lock in gains earlier on Tuesday, with the , and all closing in the green. Hong Kong’s Hang Seng outperformed, up 0.9%, as it was the only exchange to offer Chinese stocks during the mainland’s Golden Week holiday.

Australia’s rose 0.35% after the country’s central bank kept interest rate policies . The Australian Treasury is set to its Federal budget stimulus, designed to expand business investment and job creation to offset the carnage left by the pandemic.

Yesterday, US stocks closed at the top of the session, producing solid candles in a show of strength.

S&P Daily

The S&P 500 may have blown out an Evening Star (red circle) as it aims to complete a small, H&S bottom, reversing the recently established short-term downtrend.

However, despite yesterday’s exuberant rally, traders don’t seem to expect the mood to last. The revealed that fear actually increased, rather than dissipated.

VIX Daily

The volatility index has increased in recent weeks on concerns of a contested US presidential election.

Yields, including for the Treasury note, trimmed yesterday’s surge, as investors, in a , dumped bonds for equities.

10-year Treasuries Daily

Technically, while a H&S pattern failed, yields found resistance by the 200 DMA, showing it’s not a clear path to risk-on.

‘s trajectory has been extremely tricky to . The precious metal has shifted between its haven status and an asset used as an interest rate hedge. That’s been reflected in various, conflicting patterns.

Gold Daily

Gold Daily

Even now we’re not confident whether trading completed a bearish symmetrical triangle or is developing a bullish falling wedge.

fell away from the trend line that marks the resistance of a second, consecutive pattern.

Bitcoin Daily

The cryptocurrency is carving a path for a continued decline, strengthened by the 50 DMA.

added 1.2% to yesterday’s rebound from its three-week low, surging 5.9%, its biggest daily gain since May.

WTI Daily

WTI Daily

Technically, the price found resistance for the second day by the 100 DMA, near the top of a pennant, whose continuation characteristics suggest oil will keep falling from its completed bearish, rising wedge.

Up Ahead

  • On Tuesday, Chairman of the Federal Reserve, Jerome and ECB Chief Economist Philip deliver keynote addresses at the NABE conference
  • On Wednesday, the release of the of the Sept. 15-16 FOMC meeting could be especially fruitful for Fed watchers, beginning with details of the debate on conditions necessary to trigger a rate increase
  • The U.S. Vice Presidential debate takes place in Salt Lake City on Wednesday
  • Though the final formal round of talks is over, the British government expects trade negotiations to continue up to the EU summit in mid-October.

Market Moves

Stocks

  • Futures on the S&P 500 Index are up 1.8%
  • The Stoxx Europe 600 Index fell 0.34%
  • The Index gained 1.2%
  • The Index advanced 0.9%

Currencies

  • The Dollar Index climbed 0.1% to 93.50
  • The was unchanged at $1.1783
  • The British fell 0.1% to $1.2965
  • The strengthened 0.4% to 6.791 per dollar
  • The Japanese strengthened 0.1% to 105.68 per dollar

Bonds

  • The yield on 10-year Treasuries decreased one basis point to 0.77%
  • The yield on Treasuries declined less than one basis point to 0.14%
  • Germany’s yield increased less than one basis point to -0.51%
  • Japan’s yield climbed one basis point to 0.039%
  • Britain’s yield gained one basis point to 0.293%

Commodities

  • West Texas Intermediate crude climbed 0.1% to $39.27 a barrel
  • increased 1.2% to $41.79 a barrel
  • Gold weakened 0.1% to $1,918.84 an ounce
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