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Morning market review 19.11.2019

Good day to all!

Trump, after a meeting with the head of the Federal reserve SHA Powell, said that the rate in the US should be lower than in Europe, that is, negative. Trump, as an experienced businessman and politician, understands perfectly the real state of Affairs in the economy and how quickly investor sentiment can change. There are also elections soon, and the "electorate" likes it when it rings in its pocket, and a gallon of gasoline in its pocket. And the Democrats are seriously aiming for impeachment. They also understand perfectly well that Trama is still in power for another 4 years, and they will get up with a bone in their hand across the throat. And it seems that soon, the 1st phase of the trade agreement should be signed, but something constantly prevents this. Show must go on…

The S&P500 index - "Creeping" growth continues. New highs on the indexes they are installed almost every day. A new historical high was set by the S&P500 futures at 3,127. 50. Any price dips caused by news of the trade talks are very quickly redeemed. The market is not allowed to fall. The volatility index (VIX) it is trading around 12.50, a record high the number of shorts is open in this tool.

Risk appetite is at its maximum, according to the GS indicator . Everything is done in order to create an impression of an infinite growth of stock indices. Apparently, the growth is based on the expectations of the conclusion the agreement will continue, but there will be a correction after the signing. The higher the number of records, the maximum open positions on various instruments, the lower the volatility and the higher the risk appetite, the closer and stronger the correction will be. Yesterday we resumed shorting on the U500-12.19 futures at the level of 2401.75

Today, we expect a range of 3110-3130.

RTS and MICEX-indices can no longer Grow, but they do not want to fall.

While consolidation or sideways pattern. By MICEX corridor 2910-2950, RTS 1420-1450 . It remains to wait for an exit from this range. We believe that it is worth keeping short positions at the current levels .

The key support points for today are located for futures on RTS 142950 on MICEX 291050, and resistance on RTS 145650 and MICEX 295650

OIL – we opened long positions yesterday on the decline in oil prices. The average price of a long is about 62.40 . Oil volatility has fallen again, this time, ATR (8) at 4H is at 0.415. Oil is traded with an upward bias, and we expect to close our long positions on growth. Let's make a reservation right away, we do not expect a" mega-growth " of 5-10 dollars , and we do not recommend it to You. But potentially 64-65 dollars a barrel to see what's really on this week.

Trading range of BR-12.19 prices for today (60,95 -61,6) – (63,2 – 64,15) If oil prices rise, we plan to close long positions positions .

Precious metals – Yesterday afternoon, prices tried to update their lows, but closer to the American session, they regained their daily losses and closed with a positive result.

Many times noted and said that the prices for precious metals are affected by two factors: bond yields and news from trade negotiations. The lower the yield on bonds, the better gold and silver feel. The better the negotiations go, the greater the pressure on metals.

But we believe that the recent strong price correction, after which gold tested the 1450 mark, and silver 16.60, has ended and now we should wait for the price increase.

Today, the trading range for gold is 1460-1485 and for silver 16.82 -17.33 (spot market prices and they differ from the futures price).

Debt market – In the morning, the yield on us bonds 10Y (ten-year paper ) is at 1.81%, and on 3M (three-month bonds ) 1.54%. Formally, the yield curve on bonds signals the health of the economy, so there is no inversion. But this was achieved by the fed buying up short-term bonds. The yield on 30Y (thirty-year bonds) began to decline, relative to the previous year. yesterday to the level of 2.29%. A rise in bond yields increases the chances of stock indices rising and precious metals prices falling, while a fall in yields does exactly the opposite. Now almost everyone is sure that the fed will leave rates unchanged at its December meeting. We'll see…!/fed-pricing-shows-markets-arent-putting-much-emphasis-on-trump-powell-meeting-20191119

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