Below is a quick chart update of the main US and European stock indices. The recent theme continues, boring price action post the big volatility we saw in October. It seems people are “tired” of shuffling risk and need to “consolidate” their thoughts. From a theme point of view nothing new exciting really, the Brexit yes/no continues as well as the Italian saga, but those are known unknowns. In order for this market to move further, we need new themes.
SPX trades above the 200-day average but without real “fizz” over past days. We had the sell-off, the bounce and now it seems we need a consolidation to catch some breath. 2800 is the first resistance, followed by the 2825 resistance. 200-day support is at 2765, and lower the big 2700 level.
Nasdaq futures trade very close to the 200-day average here. 7k is a big “psychological” level. 6700 is the recent low close and the support lower. Resistance at 7230 ish which is the practically the close on that big squeeze day higher last week.
Eurostoxx 50 trades amazingly dull so far in November. 3200 is the big support, lower we have the 3175 level and then the recent “panic” lows at 3100 ish. November so far is just a max/min range of 1.5%.
DAX futures trades boring but with a weaker tone compared to the Eurostoxx 50. Autos have been hard hit for a long time in this index as well as some majors trading weak today (SAP; IFX). 11 500 is a huge level to watch. Just north of 11k, we have the big support. Resistance around the recent highs at the 11700 level.
To summarise, major US and European indices are all looking like they need to consolidate for longer. October has been a tiring month for most, especially the hedge fund space.
If this consolidation continues, expect volatilities to remain trading subdued. Eurostoxx 50 realized 10-day volatility approaches 10. 12 days ago, V2X priced market was going to move 1.6% daily as index traded close to 26. We are now at 16.75 ish pricing approx. 1% moves. 10 day realized at 0.7%…
Source: charts by Bloomberg