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Futures Trade Desk- Short-Squeeze May Fail at Month-End

Trade Desk Client Note

Global Futures Market Review

Short-Squeeze May Fail at Month-End

Latest Market Update: 
- Moves higher in equity markets triggered near-term Trade Plan numbers, but have not impacted mid-term trend, momentum, or sentiment reads. Global Charting reviews on ES, DXY, XAU, XAG, and WTI reveal pivotal price points are being hit. Equities may struggle to hold this move. 

- The constant barrage of headline news has created a near-term trade floor vortex that makes it impossible for equity and credit markets to move without being initiated or impeded by main-stream media noise and electronic trading reactions. With short-sided positions in November being reported as lower than the previous month the initial short-squeeze going into month-end may not be able to easily sustain itself in equity, bullion, and oil trade. 

- A test of support on main asset class trade is likely to be seen before a sustainable move higher can take out major resistance. 1205 on S&P 500, 1740 on XAU (Gold), 32.90 on XAG (Silver), ans 100.50 are mid-term areas of note. The near-term outlooks below may be tested many times this week before finally breaking.

Near-term Outlook: 
- Commodity Update: Gold: Sup 1655 Res 1725 Neutral 1680. Silver: Sup 30.40 Res 32.60 Neutral 31.80. Oil: Sup 94.30 Res 99.30 Neutral 96.60. 
- Equity/USD Update: S&P500: Sup 1135 Res 1185 Neutral 1165. Dax: Sup 5280 Res 5705 Neutral 5450. DXY: Sup 79.05 Res 79.40. Neutral 79.20.
- Forex Update: EUR: Sup 1.3125 Res 1.3395 Neutral 1.3265. GBP: Sup 1.5365 Res 1.5585 Neutral 1.5460. JPY: Sup 76.90 Res 78.20 Neutral 77.55.

Recent Market Updates:
- Month-end Window Dressing began with equity indices and risk being bought. The Trade Plans caught most of the moves. Bank early and often as test of both support and resistance are likely this week.

- The continuing state of flux regarding Austria and France downgrade threats following through will increase intra-day volatility this week. The above Support and Resistance updates on equity, commodity, and forex markets are designed for plotting potential intra-day price action reversal points on each asset class as regional trading sessions evolve. Trade Plans and Trade Signals provide further detail concerning trend, momentum, and overall market sentiment.

- The elevator ride warnings followed through, as the closing US re-reversal ended the worst Thanksgiving week of trade ever for US Stocks. Anybody trading these markets without a plan that rides volatility, but signals to get to cash when appropriate, will struggle to keep up. 

- Taking an eye off these European closing moves is dangerous: 20 SP 500 Points, $30 on Gold, $3 on Oil, 150 DAX points, added in 60 minutes. Low liquidity, market noise, a US Holiday, and inverted yields are allowing equity indices to hold support as interest rate markets implode. Traders are witnessing a coiled spring being wound to extremes in regard to internal market mechanics. Stand clear; Cash is King right now. 

- Month-end window dressing and book-balancing will create near-term price action going into Wednesday. The potential for December trade to break hard is high and is worth patiently waiting for. EUR and Oil fell, GBP found buyers, Gold held support, Silver dropped, Equity indices AUD and CAD held steady in a surreal period of global trade. Italian 10-year bonds hit a Greek-like 6.5% at auction today, an impossible yield for economic balance to happen. French bonds are next. 

- Interest rate market activity is clearly signaling inter-bank chaos and government financing disorder. Investors need to look near-term. Cash is King right now. Any open positions, in any market, will run the risk of massive volatility impacting global trade by Monday. 10-year Treasury note values breaking higher through 131.50 will force the USD higher and the SP 500 towards 1150, and a possible 1075 test. 

- Previous Market Updates can be found within the Trader News section.