We believe that the employment data this week is likely to lead the ISM based on enterprise surveys, so the outlook for the economy or the stock market is still relatively pessimistic. Technically, although the SP500 index is slightly supported near 2450, it still faces pressure from the 20 line above. It should also be noted that the 120 and 240 lines are about to cross. There will be some bear later. The idea of US stocks remains .
As the interest rate market, the interest rate has reflected a weak economic trend and dropped along with the moving average, but the decline was not too large. Over the past week, the 10-year U.S. Treasury yield has fallen by about 13.16 bps , and the price action was slight in terms of the extent of economic data. Technically, the interest rate has downside support. Possibly because the Fed does not intend to implement a negative interest rate, and at the same time the market anticipates the government will issue a large amount of bonds to counter the economic shock caused by the epidemic. The current idea of the interest rate market is relatively neutral, but the interest rate curve is expected toward steepness.
In terms of oil prices, on Friday, Trump released news that Saudi Arabia and Russia may restart talks on production cuts and encouraged oil prices to rise sharply. Although Russia denied later, there is still news that Russian firms may cooperate. At present, the two countries have not reached an agreement yet, so there is still no certainty whether production will actually be reduced. However, from a technical point of view, the weekly and daily histograms of oil prices are positive slopes, which is a good signal. With the current market may consider 20 as a short-term low, it will be for oil prices. However, we must pay attention to the impact of possibly fail on production cut and weak economic activity on oil prices. The overall rebound may not be that fast.
Sunday's bearish expectations were missed, and I still seem to underestimate the degree of market optimism and the power of the mean reversion. Regarding the epidemic, market confidence was enhanced by the decline rate of growth of new cases in Europe and the United States, and the House of Representatives is planning to provide another trillion US dollars of stimulating package; the market is also highly anticipated to the oil country meeting on Thursday. Although last week ’s employment data was worse than expected, it is clear that the market ’s reaction over the past two days has been to choose to ignore the bad news but amplify the good news. Technically, the stock market has firmly stood above 20 EMA and surged for two days, the U.S. Treasury yield has risen, and the US dollar has fallen, all of which indicate that market risk sentiment is very risk-on. In addition, the weekly MACD histogram has turned to a positive slope and signaling no short positions are allowed. In a short period of time, it is not ruled out that there is a possibility that the short-term price may climb to test 60 EMA, but the 60 EMA is a stronger resist, and the more good news is needed to maintain the bull. Otherwise, according to the experience of the past bear market, if it does not stand firmly above the 60 EMA, another wave of decline may begin. The bears must be patient.
In addition, the stupid thing I did today was to close the SPX500 short orders too late but instead close the USDCNH short orders too early. The blame is still on the psychological factors of reluctance to accept the mistake and stop-loss, still need to reduce this kind of mistake!