Oil has a very bearish chart. If that support breaks then look out:
Metals rolled:
Miners (NYSE:RIO) too:
And EM stocks (NYSE:EEM):
Plus junk (NYSE:HYG):
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As the US curve was vaporised again:
And stocks puked:
The proximate cause was strong services ISM:
Economic activity in the services sector grew in November for the 30th month in a row — with the Services PMI® registering 56.5 percent — say the nation’s purchasing and supply executives in the latest Services ISM® Report On Business®.
“In November, the Services PMI® registered 56.5 percent, 2.1 percentage points higher than October’s reading of 54.4 percent. The Business Activity Index registered 64.7 percent, a substantial increase of 9 percentage points compared to the reading of 55.7 percent in October. The New Orders Index figure of 56 percent is 0.5 percentage point lower than the October reading of 56.5 percent.
Coupled with still strong Fed inflation nowcasting:
For the week ending November 29, USD short positioning was scaled back by 8Kto-4K. EUR longs declined by 1K to 122K. JPY shorts increased from-65K to-67K. GBP shorts increased by 1K to-37K. CHF shorts were little changed at-14K. CAD shorts increased by 4K to-16K. AUD shorts increased by 2K to-45K. NZD shorts rose from-4K to-5K.MXN longs increasedby 3K to 66K.
As I keep saying, it may be that the DXY has topped, but it is too early to be trading the recovery drop in it. Ahead is more Fed, likely recession, a global shock and risk-off.
Not short DXY and long AUD stuff.
Written By:
David Llewellyn-Smith
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