TRACKRECORD DAILY
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TRACKRECORD DAILY

More added to the Wall of Worry

While the fundamentals of relentless money printing will push asset prices higher over the longer term, the shorter term could see much volatility from various risk factors on the geopolitics front.

MARKET OBSERVATION

The Energy Stack Keeps Growing

Historically, whenever humanity finds a new energy source, it doesn’t replace the previous one, but instead adds to it:

DAY AHEAD

There are no notable events for the day ahead. Risk will be driven by virus cases and US tech stock jitters.

TRADING PLAN

1. Currencies: Keep short USD and long NZD, & CNH. The resistance for USDCNH is at 6.55–6.57 and support is at 6.38–40. 6.40 is a good level to reduce some shorts, and get ready to sell back on any rallies that occur. Support for NZD is at 0.7140–50. The weakness in US stocks is not really strengthening the USD and that is a good sign.

WHAT HAPPENED YESTERDAY

As of New York Close 10 May 2021,

  • The Israeli military retaliated to missile attacks on Jerusalem from militants in Gaza with airstrikes in Hamas-ruled Gaza areas for the first time since 2014. The escalation in violence dented risk sentiment as fears of more clashes ahead of religious celebrations in the days ahead.
  • S&P 500 fell -1.0% on Monday, as negative momentum accelerated in the heavily-weighted growth stocks with selling interest leaking into the broader market late in the day. The Nasdaq (-2.6%) and Russell 2000 (-2.6%) both dropped -2.6%. The Dow Jones Industrial Average was up as much as +0.9% intraday at all-time highs above the 35,000 level, but it retraced from that level and closed lower by -0.1%.
  • Growth stocks were heavy on no specific macro catalyst, but some investors blamed the negative reaction to Citigroup downgrading Alphabet (GOOG 2340.66, -57.03, -2.4%) and Facebook (FB 305.97, -13.11, -4.1%) to Neutral from Buy, and the rotation towards cyclical stocks as potential catalysts.

HEADLINES & MARKET IMPACT

U.S. pump prices head for highest since 2014 as hacked fuel pipeline shut

SENTIMENT

FX

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