March 08, 2019Market review and metrics for Forex, Oil, S&P500 & Yields.

Pivot points, Support, Resistance & Fibonacci Reversal levels; Chart of Interest – <Oil_WTI>. {updated 5PM EST}

FX Performance (Strongest to Weakest)
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  • Market performance (DAILY)

    Market Performance (click to enlarge)

Market Comments
Forex  As financial markets continue to digest the ECBs’ state-of-the-global-economy assessment, the US Bureau of Labor Statistics released the Non-Farm employment report for February 2019. The headline figure, which invariably sets algorithmic trading models off in frenzied activity, came out at a disappointing +20k, a huge miss from the +180k that was forecast. A deeper dive though shows that the report, not only wasn’t as bad as it looked, but actually had some encouraging nuggets in the key metrics. Of particular note was the rise in the Average Hourly earnings, an indication that the tight labor market was forcing wages higher, and the drop in unemployment rate back to 3.8%. Canada also released its employment data and it was another blockbuster. Every measurable data point either beat or shattered market consensus which is a bit perplexing given that the country is apparently in the midst of a sharp slowdown. Guess its important to remember that these are lagging statistics. Kiwi was the best performing major, a byproduct of the relative transparency of its monetary policy path, at least for now. British Pound was the worst performing major as investors reduce their exposure ahead of key BREXIT votes next week.
S&P500 The S&P500 index ended the day and week lower as the inability to push through resistance at 2800-20 and the ever growing concern about global economy prompted investors to pare their exposure a bit. This is not the sell off that market pundits pine for after a heady rally so that they can load up again but a few more sessions like this and it might morph into that yet.
Oil & Yields
West Texas Intermediate (WTI) (a.k.a – US crude Oil) ended the day lower but was relatively unchanged for the week. Price action suggests that yesterdays’ ECB event is still reverberating through the financial markets. The crux of the message was that a global slowdown in economic growth is here and is likely to extend for a much longer period than had been forecast. This has to lessen demand which, despite the best efforts of OPEC+, will exert downward pressure on prices. Every now and then it is interesting to point out that US is the world’s biggest producer, ahead of Saudi Arabia and Russia, and higher crude oil prices that OPEC+ desires make shale oil production that much more appealing  So an increase in US oil production, largely fueled (no pun intended) by shale oil, and skepticism about OPEC+ unity, especially countries like Russia who might see the benefit of grabbing market share at the expense of price, are factors that could pressure the commodity dubbed “black gold” to the point where it might lose some its luster going forward.
  • Chart of Interest – Oil_WTI (Daily)
    The failure to rally through $58, predicated in large part due to global growth slowdown, saw price action turn bearish and breach the dynamic ascending trend line at $56.20. The sell off intensified piercing moderate support at $55 before rallying off support in the mid $54’s to end the week above EMA(21 day) which currently sits at $55.60. Breaking todays’ low at $54.30 could see a move down to $51.20 in short order and bring the bears out of hibernation.

    (click to enlarge)

  • Pivot Points & Fibonacci Retracement Levels
    A technical analysis indicator used to try and determine the short-term trend of the market. The pivot point is calculated from previous trading periods’ price action. If the market on the following period trades above the pivot point it is thought to be exhibiting bullish sentiment, whereas trading below the pivot point is seen as bearish. The Fibonacci retracement is the potential reversal of a financial instrument’s original move in price.

    Market Metrics (click to enlarge)