We can assume that from this point forward hedge funds are no longer hedged and will be forced sellers on any downside follow-through.
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rssMajor indices claw back some of the losses from Friday’s trade
NASDAQ index leads the way
The major indices clawed back some of the losses from Friday’s trade with the NASDAQ index taking back the most. The Dow industrial average lagged.
The final numbers are showing:
- Dow industrial average +236.47 points or 0.68% at 35135.99
- S&P index +60.61 points or 1.32% at 4655.25
- NASDAQ index up 291.19 points or 1.88% at 15782.84.
- Russell 2000 fell -3.95 points or -0.18% at 2241.97
At the highs, the major indices showed:
- Dow Jones up 388.57 points or 1.11%
- S&P index up 78.45 points or 1.71%
- NASDAQ index up 341.5 points or 2.2%
Some big winners today included:
- Moderna, +11.71%
- Goodrx, +8.85%
- Rivian automotive, +6.98%
- Nvidia, +5.96%
- Lam research, +5.95%
- Roblox, +5.47%
- Tesla, +5.11%
- AMD, +4.55%
- Salesforce, +4.36% (Salesforce will announce earnings after the close tomorrow).
Some big losers today included:
- Novavax, -11.08%
- Merck, -5.41%
- Worthington industries, -3.77%
- Crowdstrike, -3.55%
- Bed Bath & Beyond, -3.44%
- Bristol-Myers Squibb, -3.4%
- Wynn resorts, -3.16%
- RobinHood, -3.01%
- Pfizer, -2.96%
- Beyond Meat, -2.83%
- Twitter, -2.8%
Thought For A Day
Hospitalizations rise in the epicenter of omicron
A look at the latest Guanteng data
The market is feeling better about the possibility of mild illness from omicron but the data will ultimately be where the market goes.
The epicentre of the outbreak is the province of Guanteng in South Africa. The latest hospitalization numbers were released about two hours ago and show a sharp rise.
There’s some time lags that make this difficult to interpret and the numbers have to be weighed against the overall number of cases and the possibility of widespread unreported cases.
Another data point is the viral load in wastewater in Pretoria. Unfortunately, it’s also not painting a pretty picture.
Oil retraces 50% of the omicron rout. Does OPEC really have the barrels?
Oil now above $72.50
You could draw this one a few different ways but WTI crude is testing levels around the 50% retracement of Friday’s blow up.
Note that the 61.8% level coincides with the small bounce high on Friday. That’s going to be the key level going forward. A sharp drop like we saw Friday is the perfect time to use the fibonacci levels.
I think there’s a good argument for caution in all markets because I think there’s a natural inclination to be optimistic here. Of course, there are also the early reports about mild-to-moderate symptoms. I worry that’s premature. It feels like a race to find good news right now.
In the bigger picture, this note from J.P. Morgan is doing the rounds. It suggests that OPEC+ doesn’t have the spare capacity that it claims.
That’s an idea that’s been floating around for years. It makes sense that they would want to bluff because it would help them control the market and the idea they have more oil disincentivizes capex elsewhere.
In any case, those forecast for $125 per barrel next year and $150 in 2023 is intriguing. Might have wanted to save those SPR barrels.
13 Insights From Paul Tudor Jones
1. Markets have consistently experienced “100-year events” every five years. While I spend a significant amount of my time on analytics and collecting fundamental information, at the end of the day, I am a slave to the tape (and proud of it).
2. Younger generation are hampered by the need to understand (and rationalize) why something should go up or down. By the time that it becomes self-evident, the move is over.
3. When I got into the business, there was so little information on fundamentals, and what little information one could get was largely imperfect. We learned just to go with the chart. (Why work when Mr. Market can do it for you?)
4. There are many more deep intellectuals in the business today. That, plus the explosion of information on the Internet, creates an illusion that there is an explanation for everything. Hence, the thinking goes, your primary task is to find that explanation.
As a result of this poor approach, technical analysis is at the bottom of the study list for many of the younger generation, particularly since the skill often requires them to close their eyes and trust price action. The pain of gain is just too overwhelming to bear. (more…)
North America’s EV Battery Network
Saudi energy minister confirms delay to OPEC+ meetings this week
The meeting times are delayed by two days
The postponement is said to “buy us some time to review things”, according to the Saudi energy minister. This means the JTC meeting will take place on 1 December and then followed by the JMMC meeting on 2 December this week.
After which, the OPEC and OPEC+ ministerial meetings will take place although given the timeline and formalities, they could fit all of that in on Thursday too. But otherwise, it means that the meetings will run through to the weekend.
Moderna CEO says data on vaccine efficacy of Omicron variant could be known in 2-6 weeks
Moderna CEO, Stéphane Bancel, remarks to CNBC
- Believes that this virus strain is highly infectious
That leaves plenty of time for markets to flail around and stay on edge, especially more so if the Omicron variant becomes more widespread – not to mention that the key headlines noted above may only come when we get to the year-end holiday period.
And we all already caught a glimpse of how thinner conditions can impact market moves on Friday last week. So, that’s a risk well worth considering in the weeks ahead.
WHO assesses overall global risk related to Omnicron variant as “very high”
WHO urges member states to accelerate vaccination coverage
Adding that “the likelihood of potential further spread of Omnicron at the global level is high”, in a technical briefing to its 194 member states.
WHO also says that depending on the characteristics of the Omnicron variant, there could be future surges in COVID-19 cases moving forward.
I don’t think this is anything new and one shouldn’t be too startled by headlines finding the Omnicron variant in many other countries across the globe.
You can check out this tracker here for some idea but as one can see, it is pretty much starting to be found in many continents around the world already, so yeah.