As the month of October comes to a close, the markets are once again near record highs. The perfect storm seems to have been averted for the moment. This latest up move has been driven by excellent earnings results, with a few noticeable exceptions. Before we get into those expectations, let’s talk about some very important undercurrents and technical factors of importance.
In the $QQQ ETF tracking stock for the NASDAQ 100 pictured below, the RSI seems to be putting in a lower high which is a bearish signal, and the MACD also seems to be indicating a reversal soon as the momentum is slowing down.
The Political $$$ Printing Press
First, on the political front, the near disastrous shut down of the U.S. federal government and the default on U.S. sovereign debt was delayed until December. So be prepared for a repeat of that political drama in just a few short weeks. Also, the $3.5 trillion dollar human infrastructure bill has been reduced down to a more acceptable $1.75 trillion dollars, but has still not been passed. The U.S. dollar will weaken considerably on the passing of yet more deficit spending right in front of the still unresolved debt ceiling issue.
$USL, the ETF that tracks oil on a 12-month basis, is currently in a very bullish uptrend.
The combination of normal seasonal demand increases and the ever weakening U.S. dollar could push oil above $90 dollars a barrel, possibly even up to the key psychological level of $100 a barrel. At these price levels, oil and energy costs become a drag on the entire economy, as well as the lead factor in inflation.
$SPY, the ETF tracking stock of the S&P 500
The Technical Perspective
From a technical analysis perspective, shallow new highs after a deep pullback is an early sign that the current trend is faltering. November will be a key month as we need to watch where the market pulls back to. If the market can make yet another higher low then the uptrend will stay intact. But if we break below the October support level on the next pull back, then the markets may break a key trend line.
$GBTC the tracking stock for $BTC
As shown in this chart of the Bitcoin tracking stock, $GBTC surged to new highs as a new ETF tracking Bitcoin Futures was announced. Currently, it is consolidating those gains. Some analysts believe $BTC will surge even higher on continued dollar weakness, as it has thus far been a good hedge for inflation.
Earnings Analysis
Earnings season is not yet over but thus far, banks have reported blow out earnings on massive merger and acquisition activity, as well as IPO activity. Internet and social media earnings have been meeting or missing at best.
$AMZN surprisingly had a big miss due to supply chain issues, which are likely going to cost them billions extra this holiday season, compounded with a general slowdown in online spending as people return to traditional retail.
This chart of $AMZN shows the stock stuck in a range with declining momentum.
November will be a critical month as we head into yet another political impasse in early December, with inflation at all time highs and a holiday season that is bound to be plagued by supply chain problems. We continue to urge caution to the investor and feel short term swing trading will be the order of the day.
Until next month trade well.
What’s New from DAS
We released a new production version during the month of October: 5.6.4.15. This version includes an extensive list of enhancements and bug fixes to the DAS Trader Pro platform:
Enhancements
Chart
– Added position avg cost line to chart.
– Price Study Line: added line width config.
– Pivot point study: added line width config.
– Volume by price study: added VAH and VAL.
– Added chart lv1 yesterday close updating in replay mode.
Hotkeys
– Added hotkey to set VWAP anchor period.
– Added hotkey script “PRICE=OPEN”, “PRICE=PCL” for open and previous close prices.
– For trigger order hotkey script, added “PREF:RouteName” for specifying route of stop order.
– Added hotkey “FixTags=tag1=value1|tag2=value2…”.
Montage Display
– Show all MMIDs for ladder view in Montage.
– Changed Hi/Low ticker window volume display format. For example, 3567000 is now 3,567,000.
ScreenRecorder
– ScreenRecorder: Added new config window for Screen Recorder.
– ScreenRecorder: Added option to set time step for Rewind and Forward, and updated “Play dialog”.
– ScreenRecorder: Added option to select directory for saving screenshot and video.
Options Trading
– Changed options symbol display format in Position window.
– Changed options symbol display format in Options Chain window.
– Changed options symbol display format in Montage window.
Short Locate Window
– Added option to customize column background/foreground colors.
– Inquire price for all routes.
– Added Popup menu for cancelling order/reject/accept offer.
– Short Locate window update: Allow locating less than 100 shares.
– Show reminder for locate request for symbols with non short recycling.
Help Resources
– System Notice under Help manual now links to twitter.
– Added manual item Knowledge Base under Help.
Admin Functions
– Added function to search trader/account by permission.
– Added option to filter trader by notes and security prompt for Admin->Trader Logon.
– For Admin Ticket window, added “ExeNum” column to display fill number.
– Added option to filter trader by notes and security prompt for Admin->Trader Logon window.
API Updates
– CMDAPI update: For trailing stop order type processing in %ORDER, now uses comma as separator instead of space. (For exmple, TL:1 P:425.58 is now TL:1,P:425.58)
– Quote Replay: Updated CMDAPI quote refresh frequency.
– CMDAPI: Added support for range market order (STOPRANGEMKT)
– CMDAPI: Added command $LDLU for limit up/down price.
– Added short locate command set to CMD API.
– CMDAPI: For NEWORDER command, added “Display=0/Num” parameter for iceberg/hidden order.
Bug Fixes
Bug fix: Orders and Trades window number columns are not sorting correctly.
Bug fix: Basket stop range order high/low price not switched if triggered by alert.
Bug fix: Options chain column width changes when switching symbol.
Bug fix: “Ignore this account” not working for disabling sound alerts in Account Monitor.
Bug fix: Market viewer “$Val” can’t sort.
ScreenRecorder: Bug fix: Failed to get Event List.
ScreenRecorder: Bug fix: order/trade events do not work when enabling checkbox ‘RecordEvents’.
ScreenRecorder: Bug fix: Failed to save audio devices.
ScreenRecorder: Bug fix: hotkey: Failed to get value of IsRecordAudio when screen recorder window is opened.
Bug fix: Screen recorder does not allow user to select directory for recordings.
Bug fix: Text display is cut off in level1 area of Montage window when stock is halt.
Bug fix: Double-clicking does not work in the chartstudy configuration window.
We highly recommend that you review the release notes here.
Please be sure to install the latest version of the DAS Trader Pro platform. You can do this very easily from DAS by clicking Tools > Auto Upgrade. You can learn more about the Auto Upgrade feature in our Knowledge Base.
#1 Best Trader Fall Competition
We wanted to congratulate the winners from the Fall #1 Best Trader competition. They were: BEST559, BEST964 and BEST591. Tune in on Friday, November 12th for our Winner’s Circle live stream with the winners from the fall competition.
Watch our Streams on YouTube
You can view the most recent live stream here as well as all of our live streams from this link. Also be sure to subscribe to our YouTube channel for educational and trading videos as well as all things DAS! And also be sure to follow us on all major social media platforms by following @dastrader.
If you have any ideas for anything you want to see on our live stream, please send us an email: newsletter@dastrader.com.
